A firm in a perfectly competitive industry
a. is unaffected by the entrance of new firms into the industry, since entering firms affect only the prices they themselves receive.
b. always produces more output in the long run than in the short run.
c. may choose a different output in the long run than in the short run.
d. earns economic profit in the long run but not in the short run.
c
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Identify the correct statement. a. An increase in the price level in an economy will increase the real value of dollar-denominated assets. b. An increase in the price level in an economy will shift the aggregate expenditure line upward
c. An increase in the price level in an economy will decrease the equilibrium level of output demanded. d. An increase in the price level in an economy will cause an upward movement along the aggregate demand curve. e. An increase in the price level in an economy will shift the aggregate demand curve rightward.
Points that lie below the production possibilities curve are inefficient because:
A. too many goods are being produced. B. producers face scarcity. C. producing more of one good means producing less of the other. D. more of one good could be produced without producing less of the other.
If pizza used to be produced in a perfectly competitive market, and now the pizza market has become a monopoly, we can expect:
A. less pizza to be sold at a higher price. B. more pizza to be sold at a higher price. C. less pizza to be sold at a lower price. D. more pizza to be sold at a lower price.
One key difference between options contracts and futures contracts is:
A. in an options contract, the rights belong to one party. B. in a futures contract, one part has more rights than the other. C. in a futures contract all rights are held by just one party. D. with an options contract both parties have equal rights.