Suppose when a market has four firms, average economic profit is $1,000 per month. When the market has five firms, the average economic profit is -$50 per month. This suggests that
A) the long-run equilibrium number of firms is between four and five.
B) the long-run equilibrium number of firms is four.
C) the long-run equilibrium number of firms is five.
D) there is no long-run equilibrium in this market as profits can never be zero.
A
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Suppose U.S. net exports are -$400 billion and the U.S. government sector surplus is $200 billion. Then in the private sector, saving minus investment equals
A) -$600 billion. B) -$200 billion. C) +$600 billion. D) +$200 billion.
Business fixed investment
a. includes the building of single- and multi-family housing units. b. is the change in business inventories. c. is the smallest subcomponent of investment. d. consists of purchases of a newly produced plant and equipment.
Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers, or buy new batteries). She's delighted. This is an example of
a. private property abuse b. an externality cost to the person who has the radio c. a negative externality enjoyed by Cindy d. a positive externality enjoyed by Cindy e. a public good
Which of the following statements is correct?
a. The demand curve facing a competitive firm is horizontal, as is the demand curve facing a monopolist. b. The demand curve facing a competitive firm is downward sloping, whereas the demand curve facing a monopolist is horizontal. c. The demand curve facing a competitive firm is horizontal, whereas the demand curve facing a monopolist is downward sloping. d. The demand curve facing a competitive firm is downward sloping, as is the demand curve facing a monopolist.