If the typical firm in a perfectly competitive market is earning positive economic profits then which of the following would be expected to happen?
a. Firms will exit the market.
b. New firms will enter the market.
c. There will be neither entry nor exit in this market.
d. There will soon be a depression in the market.
B
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The total gains from trade within a price system is
A) the area beneath the market demand curve and above the market clearing price plus the area above the market supply curve and beneath the market clearing price. B) the area beneath the market supply curve and above the market clearing price plus the area above the market demand curve and beneath the market clearing price. C) the area beneath the market demand curve and above the market clearing price minus the area beneath the market supply curve and beneath the market clearing price. D) always equal to zero.
An economic justification for government providing public goods and services is that many people can benefit regardless of whether they pay or not
a. True b. False Indicate whether the statement is true or false
If a country wants to make extensive use of monetary policy to address domestic issues, then that country should adopt a floating exchange-rate.
Answer the following statement true (T) or false (F)
A price index that tends to be a leading indicator of future inflation rates is the
A. GDP price index. B. retail price index. C. producer price index. D. consumer price index.