In a perfectly competitive market, positive economic profits act to
A) attract new entrants into the industry.
B) drive potential competitors away from the industry.
C) prevent reinvestment on the part of firms within the industry.
D) signal resource owners elsewhere not to invest their capital in this industry.
Answer: A
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Which of the following is an intermediate target?
A) M2 B) reserves C) unemployment rate D) inflation rate
If AVC=$5 and AFC=15, then AC=
a. $15 b. $5 c. $20 d. $10
Advertising: a. cannot influence market demand
b. shifts the average total cost curve upward. c. is used only by perfectly competitive firms. d. makes demand more elastic by creating customer loyalty.
The supply curve of books (which are produced using paper made from trees) will shift to the left in response to
a. a decline in college tuition. b. an increase in home building. c. an increase in the supply of lumberjacks. d. an end to government regulations that limit timber harvesting in national forests.