We would expect an industry to expand if firms in that industry are:
A. earning normal profits.
B. earning economic profits.
C. breaking even.
D. earning accounting profits.
Answer: B
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An industry with only two competing firms is called a ________
A) duopoly B) perfect competition C) monopoly D) monopolistic competition
According to the authors of your text,
A) society could continue to exist even if people were totally selfish. B) genuine concern for the well-being of others is essential if any social cooperation at all is to occur. C) anarchism, or a society without a coercive government, is the only socio-political system consistent with free markets. D) rules are necessary for government institutions, but not for market institutions.
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. A bundle of goods that Country B could not make would be:
A. (400 iPods, 250 tablets). B. (300 iPods, 500 tablets). C. (200 iPods, 750 tablets). D. (100 iPods, 1,000 tablets).
The wealth effect says that if there is an increase in the price level, you will:
A. experience some reduction in your level of wealth as a result. B. experience some increase in your level of wealth as a result. C. typically spend more on all goods and services as a result. D. typically shift your spending to assets from consumption goods.