In a perfectly competitive market, what would you expect to happen to the number of firms and firm profitability in the short run and long run if demand for the product rises?
What will be an ideal response?
In the short run, firms will earn positive economic profit as price rises. In the long run, some firms will enter the industry, increasing market supply, and reducing the market price until all firms are earning zero economic profit.
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Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?
a. Alland has both a comparative and absolute advantage in producing food. b. Alland has comparative advantage, but not an absolute advantage, in producing food. c. Georgeland has both a comparative and absolute disadvantage in producing clothing. d. Georgeland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
In the U.S., from the early 1980s through the early 1990s,
a. both inflation and nominal interest rates rose. b. both inflation and nominal interest rates fell. c. the inflation rate fell and the nominal interest rate rose. d. the inflation rate rose and the nominal interest rate fell.
Which of the following is a prediction of the median voter model for a two person political race?
A) Candidates will try to present themselves as extremists. B) Candidates who are behind in the polls will try to move closer to the position of their opponents. C) Candidates will try to label their opponents as "too middle-of-the-road." D) Candidates will try to be specific and clear about their own programs and the means of achieving them.
Every hour, the federal government spends about-
What will be an ideal response?