When a perfectly competitive firm experiences positive economic profits in the short run
A) the high barriers to entry prevent further competition.
B) existing firms exit the industry.
C) new firms enter the industry.
D) firms have no incentive to exit or enter the industry.
Answer: C
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Answer the following statements true (T) or false (F)
1) In the situation in which consumers have nonidentical demands in two-part pricing, the profit-maximizing user fee is equal to the marginal cost of use. 2) In the situation in which consumers have nonidentical demands in two-part pricing, a firm's profit is always increased if it adjusts the access fee and user fee to sell to all consumers. 3) In all-or-nothing offers, the products packaged together are all the same. 4) If Pasta Meals sells its pasta and pasta sauce in a package and sells the products individually, this is an example of pure bundling. 5) Commodity bundling can increase a firm's profit and lower their transaction costs.
Karl Marx was critical of markets on the grounds that they are not efficient
a. True b. False Indicate whether the statement is true or false
Why is free trade considered beneficial when consumers pay higher prices for products than they would have within a strictly domestic market?
a. Economists place more emphasis on producers and supply than they do on consumers and demand. b. Losses experienced within the domestic market are offset by gains within developing countries. c. The higher prices paid within the domestic market are temporary and usually decline in time. d. Negative effects experienced by consumers are offset by gains experienced by producers.
An increase in the demand for bonds generates
A) an increase in both the interest rate and the exchange rate. B) a decrease in both the interest rate and the exchange rate. C) an increase in the interest rate and a decrease in the exchange rate. D) a decrease in the interest rate and an increase in the exchange rate.