A market is called monopolistically competitive if each firm has the same product but consumers can choose to purchase the product from any firm.
Answer the following statement true (T) or false (F)
False
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For years, economists believed that market structure explained the ability of some firms to earn economic profits
For example, firms in industries with little competition and high barriers to entry would earn higher profits than firms in competitive industries with low entry barriers. Which of the following has caused economists to question this explanation and seek other explanations for why firms are profitable? A) In recent years, new technologies have increased the potential entry of new firms in industries with high entry barriers. B) Studies have shown that, on average, firms in competitive industries earn higher profit rates than firms in industries with little competition. C) The market structure explanation fails to explain how firms in the same industry can have very different levels of profit. D) Studies have shown that firms in industries that have little competition and high entry barriers are not very profitable. Economists conclude from this that some competition is necessary in order to force firms to lower their costs and develop products that satisfy new consumer demands.
According to Angus Madison, a leading authority in the area, world per capita GDP
a. increased by about 50 percent during the 800 years following year 1000 . but it increased by nearly tenfold during the past 200 years. b. increased by nearly tenfold during the 800 years between 1000 and 1813, but it increased by only 50 percent during the past 200 years. c. has grown steadily during the past 1000 years. d. Grew at an annual rate of more than 2 percent during 1000-1813, but the annual growth rate has declined as the population increased during the past 200 years.
The recognition time lag recognizes that it takes time
A. for the politicians to enact the policy once the need for change has been recognized. B. to get politicians to agree on the best policy to enact. C. for any change in policy to take effect and for people to recognize that the policies are effective. D. to collect information about the state of the economy.
Refer to the table below. The balance on the financial account was a:
The following table contains hypothetical data for the U.S. balance of payments in a year. Answer the following question on the basis of these data. All figures are in billions of dollars. U.S. goods exports +$390 U.S. goods imports -498 U.S. service exports +133 U.S. service imports -107 Net investment income +12 Net transfers -22 Capital account -5 Foreign purchases of U.S. assets +156 U.S. purchases of foreign assets -59 The following table contains hypothetical data for the U.S. balance of payments in a year. Answer the following question on the basis of these data. All figures are in billions of dollars. U.S. goods exports +$390 U.S. goods imports -498 U.S. service exports +133 U.S. service imports -107 Net investment income +12 Net transfers -22 Capital account -5 Foreign purchases of U.S. assets +156 U.S. purchases of foreign assets -59 A. $92 billion surplus B. $97 billion surplus C. $92 billion deficit D. $97 billion deficit