In the long run, a perfect competitor
A. earns zero economic profits.
B. produces at its shutdown point.
C. earns positive economic profits.
D. earns positive profits but will not make losses.
Answer: A
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If the government runs a budget deficit, then
A) national saving is negative. B) household but not business saving must pay for the deficit. C) part of household and business saving finances the deficit. D) national saving cannot fund investment.
Sofia, a political science student, thinks that the government should intervene to revive declining industries like video rentals and print newspapers
The government, she reasons, can resolve the coordination problem of getting the agents in these markets to trade. Do you agree with her? Explain your answer.
The dollar rate of return on euro deposits is
A) approximately the euro interest rate plus the rate of depreciation of the dollar against the euro. B) approximately the euro interest rate minus the rate of depreciation of the dollar against the euro. C) the euro interest rate minus the rate of inflation against the euro. D) the rate of appreciation of the dollar against the euro. E) the euro interest rate plus the rate of inflation against the euro.
Zipco's accounting profit is equal to its
a. total revenue minus opportunity costs b. total revenue plus opportunity costs c. total revenue minus imputed costs d. total revenue minus explicit costs e. total revenue minus explicit and implicit costs