Refer to the diagrams, which pertain to a purely competitive firm producing output q and the industry in which it operates. In the long run we should expect:
A. firms to enter the industry, market supply to rise, and product price to fall.
B. firms to leave the industry, market supply to rise, and product price to fall.
C. firms to leave the industry, market supply to fall, and product price to rise.
D. no change in the number of firms in this industry.
C. firms to leave the industry, market supply to fall, and product price to rise.
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Holding other factors constant, a decline in the price of new capital goods will:
A. increase national saving. B. increase investment. C. decrease national saving. D. decrease investment.
One bag of flour is sold for $1.50 to a bakery, which uses the flour to bake bread that is sold for $4.00 to consumers. A second bag of flour is sold to a consumer in a grocery store for $2.00 . Taking these three transactions into account, what is the effect on GDP?
a. GDP increases by $1.50. b. GDP increases by $3.50. c. GDP increases by $6.00. d. GDP increases by $7.50.
A report indicated that the average real wage in manufacturing declined by 2 percent between 1990 and 2000. If the CPI equaled 1.30 in 1990, 1.69 in 2000, and the average nominal wage in manufacturing was $35 in 2000, what was the average nominal wage in manufacturing in 1990?
A. $21.13 B. $26.92 C. $27.47 D. $26.40
The country of Wiknam has net capital outflow of $1,000 . government purchases of $5,000 and consumption of $20,000 . Which of the following is correct?
a. If its domestic investment is $1,000 . its GDP is $26,000. b. If its domestic investment is $2,000 . its GDP is $28,000. c. If its domestic investment is $5,000 . its GDP is $29,000. d. None of the above are correct.