When firms earn above normal rates of return
A. they tend to leave the industry and seek profits elsewhere.
B. they are still breaking even economically.
C. they are able to raise their prices to increase their profits.
D. they are earning positive profits and new firms are likely to enter the industry.
Answer: D
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According to Ricardian Equivalence, consumers may not respond to a tax cut ________
A) if that tax cut is directed solely at upper income groups B) if that tax cut is directed solely at lower income groups C) since they understand a tax cut today will lead to a tax increase in the future D) if they lack patriotic fervor
Perfectly competitive markets feature relatively high barriers to entry.
Answer the following statement true (T) or false (F)
If the quantity of euro demanded were greater than the quantity supplied, then the price of the
a. euro would rise. b. euro would fall. c. dollar would rise. d. euro would be in equilibrium.
When the price is $2
A. quantity supplied is greater than quantity demanded and, therefore, price must rise to get to equilibrium.
B. quantity supplied is less than quantity demanded and, therefore, price must fall to get to equilibrium.
C. quantity demanded is greater than quantity supplied and, therefore, price must rise to get to equilibrium.
D. quantity demanded is greater than quantity supplied and, therefore, price must fall to get to equilibrium.