Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase?
A) an increase in the price of soybeans B) an increase in the demand for corn
C) a decrease in the price of corn D) an increase in the price of soybean seeds
C
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Answer the following statement(s) true (T) or false (F)
1. When a competitive firm earns zero profit, the market price is equal to both the firm's average and marginal costs. 2. In a competitive constant-cost industry, all firms have the same break-even price. 3. A government subsidy would allow all firms in a competitive constant-cost industry to earn a positive profit in the long run. 4. Sunk costs cannot affect a firm's short-run supply, but they can affect its long-run decision to exit the industry. 5. If the market price is currently above the shut-down price, the firm will be making positive profits.
When investors become irrationally optimistic that an asset's price will continue to rise, it causes a financial bubble to:
A. start to inflate. B. be on the verge of bursting. C. burst. D. become doubted by most serious investors.
The dynamic process of competition
a. is hindered by the self-interest of business decision makers. b. puts the profit motive of sellers to work for buyers. c. conflicts with the interest of consumers when businesses pursue profit rather than the public interest. d. will permit business decision makers to earn long-run economic profit unless they are regulated by government.
The amount of corporate profits not paid out in dividends is known as
A. Retained earnings. B. The price/earnings ratio. C. The par value. D. Corporate stock.