When considering perfect competition the absence of entry barriers implies that
A. firms can enter but cannot get out of the industry easily.
B. all firms will earn economic profit.
C. firms can enter and leave the industry without serious impediments.
D. no firm can enter the industry.
Answer: C
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Refer to Figure 4.2. A shift from D2 to D1 will result from which of the following?
A) an increase in expected future profits B) an increase in net exports C) an increase in corporate taxes D) a decrease in tax credits for savings
Which of the following is the result of competing through advertising for a monopolistically competitive firm?
a. Long-run average costs shift downward. b. The firm's demand curve become flatter and shifts inward. c. The firm's demand curve keeps the same slope and shifts inward. d. Long-run average costs shift upward.
If the economy is in recession, explain what advice you would give the President, if you were a monetarist economist. What if you were a Keynesian?
Aggregate demand shifts right when the government
a. decreases taxes. b. cuts military expenditures. c. repeals an investment tax credit. d. None of the above is correct.