Answer the following questions true (T) or false (F)
1. If a firm in a perfectly competitive industry introduces a lower-cost way of producing an existing product, the firm will be able to earn economic profits in the long run.
2. Firms in perfect competition produce the productively efficient output level in the short run and in the long run.
3. Firms in perfect competition produce the allocatively efficient output in the short run and in the long run.
1. FALSE
2. FALSE
3. TRUE
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Of the sources of external funds for nonfinancial businesses in the United States, loans from banks and other financial intermediaries account for approximately ________ of the total
A) 6% B) 40% C) 56% D) 60%
If there are no net factor payments from abroad and no unilateral transfers, net exports of $10 billion is the same as
A) a current account deficit of $10 billion. B) a financial account surplus of $10 billion. C) net acquisition of foreign assets of $10 billion. D) net foreign borrowing of $10 billion.
For Figure 6.9 in the book, MRTS = K/(4L) with capital (K) on the vertical axis of the isoquant map. Suppose L=100 hours and K=400 machine hours at the current level of output
How much additional labor is required to maintain output if we reduce capital by one machine hour? A) One hour B) Two hours C) Three hours D) Four hours
Why do price ceilings tend to cause persistent imbalances in the market?
A. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. B. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. C. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. D. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.