Suppose all firms in a perfectly competitive industry are earning an economic profit. One would expect that, over time, the number of firms in the industry will ________ and the market price will ________.
A. rise; rise
B. rise; stay the same
C. rise; fall
D. fall; rise
Answer: C
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Refer to Figure 13-3. The marginal revenue from one additional unit sold is the sum of the gain in revenue from selling the additional unit and the loss in revenue from having to charge a lower price to sell the additional unit
Based on the diagram in the figure A) X represents the gain (price effect) and Y the loss (output effect). B) Y represents the gain (output effect) and X the loss (price effect). C) X + Z represents the loss (output effect) and Y the gain (price effect). D) X represents the loss (price effect) and Y + Z the gain (output effect).
If the interest rate at which you can lend funds is r percent per year, then the present value of Y dollars to be received next year is
a. (1 + r)Y b. Y / r c. Y d. Y - r e. Y / (1 + r)
Which of the following would not be a central issue in economics?
a. Who produces the goods? b. How is production carried out? c. Who consumes what? d. What goods are produced? e. When are goods consumed and produced?
The statement "What the economy needs is a good war" is a perverse way of acknowledging that
a. patriotism is an important factor influencing people's acceptance or rejection of specific political parties and that these parties affect national economic performance b. over-population can ignite a population-induced business cycle c. wars require new technology, illustrating the idea that necessity is the mother of invention d. governments can be a cure worse than the disease e. war generates new and multiple demands for goods in the economy and that can jump start an economy that is in a recession into its recovery phase