Under perfect competition, if some firms are taking losses in the short run, in the long run
A. equilibrium price will rise until all firms are earning zero economic profits.
B. those firms will cut back their output until they get to the level at which marginal cost equals price.
C. firms will leave the industry until all firms are making a profit.
D. those firms will earn losses until demand increases.
A. equilibrium price will rise until all firms are earning zero economic profits.
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The largest expenditure category in the United States is
A) consumption expenditure. B) wages. C) net exports of goods and services. D) government expenditure on goods and services. E) investment.
Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase health insurance?
A) the individual who is trying to purchase the policy B) the employer of the individual C) the health insurance company D) All parties in the health insurance market have access to the same amount of information.
According to Porter's Five Competitive Forces Model, which kinds of products are most likely to limit the ability of firms in an industry to raise prices?
A) complementary products produced by different firms in the same industry B) similar products produced by similar industries in low-cost countries C) differentiated products that target a small subsegment of the industry D) substitutable products produced by firms in different industries
Suppose the required reserve ratio is 20 percent. If banks are conservative and choose not to loan all of their excess reserves, the real-world deposit multiplier is
A) less than 5. B) equal to 5. C) greater than 5. D) equal to 20.