If a firm in a perfectly competitive industry introduces a lower-cost way of producing an existing product, the firm will be able to earn economic profits in the long run
Indicate whether the statement is true or false
FALSE
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Suppose the price of coffee is $3 each, the price of bagels is $2 each and a person's budget is $40. The person's real income is
A) $40. B) $13.33 in terms of bagels. C) $13.33 in terms of coffee. D) $8.
A productive efficient society
A) produces at a point on its PPF. B) can produce more of one good only by giving up some of another good. C) cannot produce unlimited amounts of a good. D) still has to make choices. E) all of the above
Which of the following is the least likely to be investment?
A. a household buying a new house B. a household saving for retirement C. GM building a new factory D. a car dealer adding to its cars on hand
The real-income effect is typically small because
A) the change in price of one particular item has little effect on total purchasing power. B) income has no relation to consumption. C) price changes tend to balance out over time. D) real-incomes are always rising.