The process of adjustment to a new long-run equilibrium in a perfectly competitive industry is complete when
A. no firms want to enter or exit the industry.
B. every firm has adjusted its production process to make the most efficient use of its resources.
C. investors in the industry receive the standard economy-wide rate of return on their investments.
D. All of the responses are correct.
Answer: D
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An open economy produces most of the goods and services that it needs, with few imports and exports.
Answer the following statement true (T) or false (F)
Which of the following is true of monopoly but not true of perfect competition?
a. Firms can potentially earn economic profits in the short run b. Total revenue is the product of price times the quantity sold. c. Firms can potentially earn economic profits in the long run. d. A profit-maximizing firm will shut down if price falls below the average variable cost.
A tariff is a tax on imports imposed by the country that is importing the goods.
Answer the following statement true (T) or false (F)
Keynesians prefer a disinflation policy of
A. stabilization. B. cold turkey. C. aggregate demand management. D. gradualism.