Firms are making profits in an increasing-cost industry. Which of the following statements describes what will happen in the long run?
A. More firms will enter this industry, causing the industry supply schedule to shift to the right and the LRAC curve facing firms to shift up.
B. Firms will exit this industry, causing the industry supply schedule to shift to the right and the LRAC curve to shift down.
C. More firms will enter this industry, causing the industry supply schedule to shift to the right and the LRAC curve facing firms to shift down.
D. Firms will exit this industry, causing the industry supply schedule to shift to the left and the LRAC curve to shift down.
Answer: A
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The portfolio demand for money reflects:
A. the money we hold for our everyday transactions. B. the money we hold for our everyday transactions and the money we hold to purchase stocks and bonds and other financial securities. C. the portion of wealth people desire to hold in the form of money. D. the money we hold to purchase stocks and bonds and other financial securities.
Which of the following would result from an increase in the demand for a good?
A. Both equilibrium price and quantity would rise. B. Both equilibrium price and quantity would fall. C. Equilibrium price would rise, and equilibrium quantity would fall. D. Equilibrium quantity would rise, and equilibrium price would fall.
If (PVB/PVC)for a given policy option equals 5.5, this means that
a. the policy option is not feasible b. for every dollar of incremental costs incurred by society, there are $5.50 in realized incremental benefits c. the policy option is feasible d. both (b) and (c) are correct
When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by
A) creating new jobs to hire workers who lost their jobs because of NAFTA. B) setting aside funds to support and retrain workers who lost their jobs because of NAFTA. C) reducing tariffs. D) imposing quotas.