If a firm in a perfectly competitive industry is experiencing higher than normal returns, in the long-run
a. Some firms will leave the industry and price will rise
b. Some firms will enter the industry and price will rise
c. Some firms will leave the industry and price will fall
d. Some firms will enter the industry and price will fall
d
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Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Given that both firms are currently using process A, the cost of requiring the firms to reduce pollution by 25 percent is ________ per day. A. $790 B. $375 C. $215 D. $75
Which of the following is true?
A) Local governments cannot collect taxes in the U.S. B) Only state governments can collect taxes in the U.S. C) Only the federal government can collect taxes in the U.S. D) The central as well as the local governments collect taxes in the U.S.
Refer to Figure 14.2. Other things equal, a decrease in inflationary expectations would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point C to point B. D) point B to point C.
The GDP deflator: a. takes government purchases into account, unlike the CPI
b. takes business investment purchases into account, unlike the CPI. c. is generally used to adjust nominal GDP to calculate real GDP. d. All of the above are true.