In the long run, the producer can change the entire plant size to produce a certain level of the output
a. True
b. False
Indicate whether the statement is true or false
True
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Assume that the LCD and plasma television sets industry is perfectly competitive. Suppose a producer develops a successful innovation that enables it to lower its cost of production. What happens in the short run and in the long run?
A) The firm will probably incur losses temporarily because of the high cost of the innovation, but in the long run it will start earning positive profits. B) The firm will be able to increase its economic profits temporarily, but in the long run its economic profits will be eliminated as other firms copy the innovation. C) Initially, the firm will be able to increase its profit significantly, but in the long run its profits will still be greater than zero but lower than its short-run profits because other firms would also innovate. D) This firm will be able to earn above normal profits indefinitely if it obtains a patent for its innovation.
Which of the following statements regarding the use of gold as money is false?
A) It is durable. B) It is acceptable to most people. C) It is valuable relative to its weight. D) It has standardized quality.
In order to understand a particular graph, it is important to know:
A.) The total number of squares in the grid. B.) Which variable is on the vertical axis and which is on the horizontal axis. C.) Where a point on the graph is. D.) Where the maximum quantity is.
If a firm is forced to take external costs into account, it will
A. increase production and charge a lower market price. B. reduce prices and hire more workers. C. reduce prices and hire fewer workers. D. reduce production and charge a higher market price.