An industry is in long-run competitive equilibrium. The price of a substitute good increases.
A. New firms will enter the market.
B. Firms will begin earning economic profit.
C. The product price will rise.
D. a and b
E. all of the above
Answer: E
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Which of the following are TRUE regarding "positive" statements? I. They describe what "ought to be." II. They describe what is believed about how the world appears. III. They can be tested as to their accuracy
A) I and II B) II and III C) I and III D) I, II and III
If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals
A) 0.5. B) 1.0. C) 2.0. D) 10.0.
The payments to the factors of production are:
A) wages. B) rent. C) rent and interest. D) wages, rent, interest, and profits.
$500 and there are two companies he could invest X dollars in: Dog Gone Salon, which has a payoff of 2X with 50% probability and $0 with 50% probability and Pretty Kitty Grooming, which has a payoff of 4X with 25% probability and $0 with 75% probability. Dean's expected payoff from investing $250 in both Dog Gone Salon and Pretty Kitty Grooming is:
A. $62.50. B. $500. C. $750. D. $250.