In the long run firms will expand as long as there are more ________, and new firms will enter the industry as long as they earn ________.
A. diseconomies of scale; positive economic profits
B. economies of scale; zero profits
C. diseconomies of scale; zero profits
D. economies of scale; positive economic profits
Answer: D
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The health care system currently in place will be dramatically changed in the next four years.
A. True B. False C. Uncertain
In international trade, dumping refers to
a. producing a lower quality good for export than what is produced for domestic consumption b. selling an export at a higher price than its price to domestic consumers c. selling an export at a price below its cost of production d. producing a lower quality good for domestic consumption than for export e. paying workers below subsistence wages
Suppose California and Wisconsin produce wine and cheese. Making a bottle of wine costs $3 in California, but $12 in Wisconsin. On the other hand, making a pound of cheese costs $4 in California, and $8 in Wisconsin. Under these conditions,
A. California should export wine and Wisconsin should export cheese. B. California should export cheese and Wisconsin should export wine. C. California should export both wine and cheese. D. the two states cannot gain from trade with each other until a third state starts to export bottle openers.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.