During the last two centuries, after adjustment for inflation,
a. corporate bonds have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for corporate stocks.
b. corporate stocks have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for bonds.
c. both corporate stocks and bonds have yielded a real rate of return of about 3 percent.
d. both corporate stocks and bonds have yielded a real rate of return of about 7 percent.
B
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If perfectly competitive firms are making an economic profit, then
A) the market is in its long-run equilibrium. B) new firms enter the market and the equilibrium profit of the firms already in the market decreases. C) new firms enter the market and the equilibrium profit of the firms already in the market increases. D) firms exit the market and the economic profit of the surviving firms in the market decreases. E) firms exit the market and the economic profit of the surviving firms in the market increases.
One consequence of rent ceilings set below the equilibrium rent is that
A) a surplus of housing units develops. B) renters are no longer exploited by landlords. C) it makes the long-run housing supply more elastic. D) search costs for housing increase.
The demand for most farm products is relatively inelastic. A drought that reduces the supply of farm products will also cause farm revenues to fall
Indicate whether the statement is true or false
Assume the firms in an oligopoly produce a differentiated product and are initially colluding
If each firm begins to cheat (to increase sales) by underpricing the other firms, as the amount of cheating increases, the resulting industry price and output will approach the outcome for: A) perfect competition. B) monopolistic competition. C) noncooperative monopoly. D) noncooperative oligopoly.