Suppose that the market for haircuts in a community is perfectly competitive and that the market is initially in long-run equilibrium. Subsequently, an increase in population increases the demand for haircuts. In the short run, we expect that the typical firm is likely to begin:
Select one:
A. incurring an economic loss.
B. experiencing neither an economic profit nor an economic loss.
C. earning an economic profit.
D. experiencing no change in its economic profit.
C. earning an economic profit.
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If capital is fixed, but a firm varies labor
A) the firm stays on the same isoquant. B) the firm moves to a new isoquant. C) the firm might move to a new isoquant, depending on how much labor is added. D) the firm's output will be dependent on the marginal rate of technical substitution.
There are 30 firms in an industry. What happens to that industry's four-firm concentration when the third- and fourth-largest firms merge?
A) Nothing, because their shares are already included in the concentration calculation. B) The industry's concentration ratio will fall. C) The industry's concentration ratio will increase. D) It is impossible to know without more information.
The official definition of poverty is
A) exactly the 12 percent of U.S. residents with the lowest incomes. B) exactly the 20 percent of U.S. residents with the lowest incomes. C) an absolute measure. D) a relative measure.
Which of the following is true of the rule of 72?
a. The rule of 72 is used to approximate annual real GDP. b. The rule of 72 determines the time required for any value to double if it grows at a constant annual rate. c. The rule of 72 is used to calculate the number of years it takes for any quantity to treble in size. d. The rule of 72 refers to the fact that real GDP doubles every 6 years. e. The rule of 72 refers to the fact that capital growth has consistently contributed 72 percent to the U.S. real GDP.