If firms in a monopolistically competitive industry are incurring losses, in the long run
A. firms will leave this industry until the firms that remain are earning a positive economic profit.
B. firms will leave this industry until the remaining firms are earning a normal profit.
C. the government will subsidize the losses incurred by these firms so as to maintain competition in the industry.
D. investment in this industry will increase to reduce production costs.
Answer: B
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At prices below a consumer's willingness to pay:
A. the buyer will not participate in the market because the opportunity cost is more than the benefit from consuming the good. B. the buyer will not participate in the market because the opportunity cost is less than the benefit from consuming the good. C. the buyer will participate in the market because the opportunity cost is more than the benefit from consuming the good. D. the buyer will participate in the market because the opportunity cost is less than the benefit from consuming the good.
If an individual's utility from consuming two goods increases, then there must be
A. in inward shift of the individual's indifference curve. B. an outward shift of the individual's indifference curve. C. a downward rotation of the individual's indifference curve. D. an inward rotation of the individual's indifference curve.
Is nominal GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period? Is real GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period?
What will be an ideal response?
Assume health insurance is provided universally by the government. This would
A) eliminate the problems of adverse selection. B) result in adverse selection. C) eliminate the problems of moral hazard. D) All of the above.