A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will
a. rise in the short run. Some firms will enter the industry. Price will then rise to reach the new long-run equilibrium.
b. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium.
c. fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium.
d. not rise in the short run because firms will enter to maintain the price.
b
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Ann Trepreneur was formerly a landlord, renting her building for $1,200 a month. She now uses her building for her own florist shop. Pick the true statement
A) The building costs Ann $1,200 per month. B) Ann incurs no opportunity cost on the building. C) Ann uses the building as a free good. D) None of the above is true.
Simultaneous causality
A) means you must run a second regression of X on Y. B) leads to correlation between the regressor and the error term. C) means that a third variable affects both Y and X. D) cannot be established since regression analysis only detects correlation between variables.
________________, which produced ______________, is commonly cited as the first American factory
a. The Oliver Evans Mill; flour b. The Almy, Slater, Brown Mill; yarn and thread c. The Boston Manufacturing Company; cotton d. The Whitney Armaments Firm; guns
Profitable investment is most effectively promoted when:
a. the money supply and price level are stable. b. inflation is rising rapidly c. monetary policy is unanticipated. d. persistent inflation increases uncertainty.