Why do firms advertise?
a. to stabilize profits
b. to eliminate zero profits
c. to create a more elastic demand curve
d. to create a less elastic demand curve
d. to create a less elastic demand curve
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The figure above shows a perfectly competitive firm. When the firm maximizes its profit, its total cost is
A) $1,200. B) less than $1,200 but more than zero. C) more than $1,200. D) zero.
The most recent data indicates households in the top fifth of the income distribution earn as much income as the bottom four fifths combined
a. True b. False
As trade restrictions are eliminated, increased imports
A. Lower competition in product markets. B. Leave the composition of the GDP unchanged. C. Redistribute income out of import-using industries. D. Shift the allocation of resources away from import-competing industries.
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.