When the macroeconomy is doing poorly (as it was in 2009), profits of existing firms decrease, creating an incentive for existing firms to exit unprofitable markets
This in turn makes it more difficult for the remaining firms to mark up price over average or marginal cost. Indicate whether the statement is true or false
TRUE
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If the long-run supply of rice is perfectly elastic, then
A) as people's incomes rise, the quantity of rice supplied decreases. B) as the price of corn falls, the quantity of rice demanded decreases. C) in the long run, a large rise in the price of rice causes no change in the quantity of rice supplied. D) in the long run, an increase in the demand for rice leaves the price of rice unchanged.
Comparative advantage identifies the good for which the producer’s absolute advantage is relatively larger, or where the producer’s absolute _____________ disadvantage is relatively smaller.
a. competitive b. profit c. productivity d. trade
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.
Arthur buys a new cell phone for $150. He receives consumer surplus of $150 from the purchase. What value does Arthur place on his cell phone?
A) $0 B) $150 C) $225 D) $300