A monopolistically competitive firm that earns economic profits in the short run will face a more elastic demand curve in the long run
Indicate whether the statement is true or false
TRUE
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If a small country were to levy a tariff on its imports then this would
A) decrease the country's economic welfare. B) have no effect on that country's economic welfare. C) increase the country's economic welfare. D) change the terms of trade. E) raise prices on its exports in other countries.
In a firm, an entrepreneur is one who
A) decides to hire or fire. B) works for the owner by running the firm. C) takes the risks associated with a business firm. D) represents the firm in legal proceedings.
If the typical firm in a perfectly competitive market is currently earning a 5% economic profit, what will happen in this market in the long run?
a. new firms will enter until the economic profits have disappeared. b. firms will exit until the economic profit reaches 10%. c. firms will neither enter nor exit, since 5% economic profit is enough to maintain the existing number of firms in the market. d. It depends on the rate of normal profit in this market.
Taxes on polluting firms have
A. can easily be avoided and are therefore, unsuccessful. B. been successful in reducing water pollution in the Ruhr River basin in Germany. C. more advantageous over voluntarism and direct controls. D. not been used in the United States.