A competitive market where firms currently earn positive economic profit will see firms exit the industry from increased competition
a. true
b. false
Answer: b. false
You might also like to view...
Suppose that Matt quits a job with the XYZ Corporation in order to look for more rewarding employment. Matt is best be considered as
A) still being employed. B) included in the economy's "hidden employment." C) frictionally unemployed. D) cyclically unemployed.
Someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. This person has:
a. confused association and causation. b. misunderstood the Ceteris paribus assumption. c. used normative economics to answer a positive question. d. built an untestable model.
The base year is the year
a. in which prices are unstable. b. in which prices are lowest. c. in which prices are highest. d. that serves as a reference point or benchmark. e. in which nominal output is largest.
Mikkelson Corporation's stock had a required return of 11.75% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.)
a.14.38% b.14.74% c.15.11% d.15.49%e.15.87%