A permanent decrease in demand for convenience store services is likely to cause which of the following in the long run?
a. an economic loss for each firm
b. a higher price for each firm's output
c. fewer firms in the industry
d. more firms in the industry
e. economic profit for each firm
C
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A speculator who feels strongly that short rates will be falling over the next few years might want to be a __________ payer in a swap contract; if he is wrong there is __________ downside risk
A) fixed-rate; no B) fixed-rate; considerable C) floating-rate; no D) floating-rate; considerable
Which of the following is NOT an example of a common property resource?
A) Water in underground aquifers B) Public highways in large cities C) Fish stocks in open waters D) Outdoor concerts
In order to maximize its profit in the short run, an airline should offer an additional flight whenever
a. its marginal revenue exceeds its sunk costs b. it marginal revenue exceeds its average total cost c. the average seat price exceeds its sunk costs d. the average seat price exceeds its average total cost e. the additional revenue exceeds the additional costs
Which of the following statements is not correct?
a. Corrective taxes can be used to place a price on the right to pollute. b. Corrective taxes allocate pollution to those producers who face the highest cost of reducing pollution. c. Corrective taxes provide incentives to develop cleaner technologies. d. Corrective taxes require the government to set a target level of pollution.