In perfect competition, _____
a. economic profits are eliminated by entry in the long run
b. economic profits are eliminated by exit in the long run
c. price is greater than marginal cost at the profit-maximizing equilibrium
d. the marginal cost curve is perfectly elastic in the long run
a
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The Granger Cases of the 1870s
(a) sealed the fate of the U.S. railroad system, even though the cases were covered under a case involving a grain elevator. (b) came before the U.S. Supreme Court because state legislatures had passed laws in the 1870s to allow state agencies to control various aspects of railroad operation, including rate setting; these laws were then challenged by railroad companies. (c) established the principle that railroads were unquestionably subject to permanent regulation. (d) are true for all of the above.
Suppose that Tom bought a bike from Helen for $195. If Helen's reservation price was $185, and Tom's reservation price was $215, the total economic surplus from this transaction was:
A. $195 B. $30 C. $215 D. $185
Beautification of the national highways through the planting of shrubs and wildflowers will
A) be profitable for a private landscaping company because they can charge passing drivers. B) benefit even people who do not help pay. C) provide a flow of services that are rival in consumption. D) provide a flow of services that involve excludable consumption.
Which of the following factors is not a major cause of long-term economic growth?
a. Investments in physical and human capital b. Constructive labor-management relations c. Expansionary monetary policy d. Effective corporate governance policies e. Government institutions and policies to improve economic efficiency