In a market with barriers to entry:
A. the implications of Adam Smith's theory of the invisible hand can be expected to hold.
B. prices will direct productive resources toward underserved markets.
C. economic profit will not fall to zero in the long run.
D. firms will earn zero economic profit in the long run.
Answer: C
You might also like to view...
The interest rate is the price borrowers pay to borrow money.Key interest rates are controlled by the Federal Reserve System.If the Federal Reserve acts to reduce interest rates, economists would expect the quantity of money demanded to
A. increase. B. decrease. C. not change. D. not change, although the demand schedule itself will shift outward.
Which of the following is an advantage to the pollution-rights approach to environmental quality?
A. Polluters are compelled to clean up completely. B. Polluters have appropriate incentives to clean up. C. This is a method of direct government regulation. D. Compliance with legal guidelines is discretionary.
In December 2008, the Federal Reserve announced that it would take extraordinary measures to address the financial crisis in the economy. These measures include all of the followingexcept
A) buying mortgage-backed securities. B) buying long-term Treasury bills. C) creating other new credit facilities to make credit more easily available to households and small businesses. D) lowering the reserve requirement to encourage banks to create loans.
Refer to the information provided in Figure 32.2 below to answer the question(s) that follow.
Figure 32.2Refer to Figure 32.2. According to Keynes, an expansionary monetary policy in the long run and after all the adjustments have been made
A. increases equilibrium output above Y1. B. increases equilibrium output above Y1 and decreases the price level below P1. C. decreases equilibrium output below Y1. D. does not increase equilibrium output.