When P < ATC in the long run, a perfectly competitive firm experiences economic profit and new firms will enter the market.
Answer the following statement true (T) or false (F)
False
If P < ATC in the long run, a perfectly competitive firm is experiencing economic losses and will exit the market.
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The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, his total economic profit is
A) $60. B) $405. C) $0. D) $210,000. E) unknown because more information is needed to determine Paul's profit.
Between two countries, comparative advantage is found by comparing the:
a. relative costs of production in each country. b. absolute costs of production in each country after accounting for inflation. c. labor hours required to produce a bundle of products in each country. d. level of interest rates in each country. e. shipping and transportation costs of each country.
Productivity in manufacturing sectors has risen faster than in service sectors
a. True b. False Indicate whether the statement is true or false
Figure 2-8
Assume that U.S. agricultural land is used either to raise cotton for clothing or to grow wheat. Curve FG in represents the current production possibilities frontier for cotton and wheat. What could cause the production possibilities frontier to shift from FG to FH?
a.
a change in government subsidies that favors wheat production over cotton production
b.
development of a new fertilizer that improves production of wheat, but has no impact on cotton production
c.
development of a new fertilizer that improves production of cotton, but has no impact on wheat production
d.
newly reclaimed swampland that is equally suited to growing either crop
e.
newly reclaimed swampland that can be used to grow either crop, but is better suited to growing wheat