Assume a perfectly competitive industry is in long-run equilibrium at a price of $150. If this industry is an increasing-cost industry and the demand for the product increases, long-run equilibrium will be reestablished at a price
A. of $150.
B. greater than $150.
C. less than $150.
D. either greater than or less than $150 depending on the magnitude of the decrease in demand.
Answer: B
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Answer the following statements true (T) or false (F)
1) The expected value of an outcome takes into consideration the associated risk. 2) The greater the risk associated with an outcome and the more risk averse the decision maker, the more likely a high insurance premium will be paid. 3) Because increased costs reduce the return on investment, shareholders may prefer managers make decisions based on the risk and not on the expected profit. 4) Placing all of your investment funds into one stock is an example of diversification. 5) Plaintiffs can be risk averse.
If a customer values good A at $15, and it costs the firm $10 to produce, the firm can increase its profits if
a. Redesign the product such that it delivers $16 in customer value b. Redesign the production process so that the costs fall to $9 c. One or both of the above d. None of the above
A country is likely to have a comparative advantage in a land-intensive activity if it has a:
A. lot of land relative to its population. B. large population relative to its landmass. C. higher opportunity cost of producing technology. D. large amount of capital equipment relative to its population.
A rise in the domestic interest rate leads to capital outflows and makes the currency depreciate
a. True b. False Indicate whether the statement is true or false