If firms in a monopolistically competitive industry are ________, then in the long run new firms producing close substitutes will enter the industry.
A. earning economic profits
B. producing where MR = MC
C. suffering economic losses
D. breaking even
Answer: A
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The real wages of workers will tend to be high when
a. industries are automating at a slow rate. b. output per worker is high. c. capital is scarce. d. profits are low.
In the equation Y = (1/1 – b + v)(a + I + G + X ? u), the term (1/1 – b + v) is referred to as the
a. level of autonomous expenditures. b. autonomous expenditure multiplier. c. balanced budget multiplier. d. tax multiplier.
If the government sets a minimum price at which a good or service can be sold, it thereby creates
A) a price ceiling. B) a black market price. C) a price floor. D) an illegal price control.
We measure a person's productive contribution in a market system by
A) the marginal factor cost theory of the firm. B) the profit maximization theory of the firm. C) the marginal revenue product theory of wage determination. D) the egalitarian theory of wage determination.