Suppose firms in a perfectly competitive market are earning an economic profit. As new firms enter, the price ________ and the economic profit of each existing firm ________
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
D
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Consider a firm that produces peanut butter. An increase in the price of peanuts will cause the firm to lower its output because
a. fixed costs will rise. b. marginal cost will rise. c. the price of peanut butter will rise. d. marginal revenue will fall.
If actual inflation differs from expected inflation, what is the slope of the aggregate supply curve?
A. The slope is horizontal in the short and long run. B. The slope is vertical in the short and long run. C. The slope is vertical in the short run and upward sloping in the long run. D. The slope is upward sloping in the short run and vertical in the long run.
Refer to Figure 18-1. The appreciation of the dollar is represented as a movement from
A) D to C. B) C to B. C) B to A. D) C to A.
An example of a public good or service provided by the federal government is
A) garbage collection. B) regulating gasoline prices. C) space exploration. D) determining the number of doctors admitted to medical school. E) setting each state government?s budget.