Suppose wheat farmers are price takers. If wheat farmers are currently making economic profits, over time we would expect that
a. existing wheat farmers would plant more acres of wheat.
b. farmers growing other crops would switch some of their land from these crops to the growing of wheat.
c. the wheat farmers will continue to earn economic profits because they would be driven out of business without such profit.
d. both a and b are correct.
D
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Explain how the decision by parents to not immunize their children, hoping that their children will not get sick because other parents have had their children immunized, is an example of free riding
How is this behavior dangerous to the public and therefore not socially optimal?
If new manufacturers enter the computer industry, then (ceteris paribus): a. some established manufacturers must exit the industry. b. the equilibrium price of computers must rise
c. the supply curve shifts to the right. d. the supply curve shifts to the left.
Which of the following is not a factor explaining how deficits on current account develop?
a. high interest rates b. budgetary deficits c. negative balance of payments d. low productivity e. the country's popularity because of the strength and stability of its economy
Which of the following will decrease aggregate demand?
a. An increase in government expenditure b. An increase in consumption c. An increase in investment spending d. An increase in imports