Several producers in industry A developed an improved technology that reduces the quantity of resources used to produce a given output. Which of the following would be expected?
a. The per-unit costs of production of the firms adopting the technology would increase.
b. In the short run, economic profits would be earned by the earliest firms adopting the technology.
c. Product price would immediately fall to the minimum average total cost of the firms quickly adopting the technology, thus retarding the rate at which firms enter the industry.
d. Producers who adopt the technology will have short-run economic losses.
B
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The lowest point on a perfectly competitive firm's short-run supply curve corresponds to the minimum point on its
A. AFC curve. B. MC curve. C. AVC curve. D. ATC curve.
Refer to Table 5.1. Hector has a comparative advantage in the production of
A) bracelets. B) tiaras. C) both products. D) neither product.
Cecilia's Cafe is a monopolistic competitor. If Cecilia's is currently producing at the output level at which her average total cost is minimized and the cafe is earning an economic profit, then, in the long run, output will
a. decline and average total cost will increase b. decline and average total cost will decrease c. remain unchanged as Cecilia's strives to minimize costs d. increase and average total cost will be greater e. increase and average total cost will be smaller
According to rational expectations theory, a long period of unemployment is necessary to reduce inflation
a. True b. False Indicate whether the statement is true or false