What kind of profit can a monopoly make in the short run? In the long run? Explain your answers
What will be an ideal response?
In the short run, a monopoly can make an economic profit, zero economic profit, or incur an economic loss. In other words, any sort of profit outcome is possible in the short run. In the long run, a monopoly can make an economic profit or zero economic profit. A monopoly will not incur an economic loss in the long run because it would shut down. The key result that differentiates it from firms in other types of markets is that a monopoly can make an economic profit in the long run. It can do so because there are barriers to entry. These barriers prevent other firms from entering the market and usurping part of the economic profit.
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Suppose the growth rate of GDP in the United States is 4.2 percent. If 1.1 percent and 1.4 percent of GDP growth are due, respectively, to capital and labor growth, the amount resulting from technological progress is
A) 0.3 percent. B) 1.1 percent. C) 1.4 percent. D) 1.7 percent.
If the government of Venezuela made policy changes that increased national saving, the real exchange rate of the peso would
a. depreciate and Venezuelan net exports would rise. b. depreciate and Venezuelan net exports would fall. c. appreciate and Venezuelan net exports would rise. d. appreciate and Venezuelan net exports would fall.
When the First Fundamental Theorem of Welfare Economics doesn't hold, there is a market failure.
A. True B. False C. Uncertain
Answer the following statements true (T) or false (F)
1. Being a "jack-of-all-trades" implies reducing the reliance on the division of labor. 2. Even with the use of money, exchange and trade cannot occur if there is no coincidence of wants. 3. One of the most important economic resources is money. 4. Maximum profits are what motivate consumers to decide who will get the goods and services in a market system.