In a perfectly competitive market that is in long-run equilibrium, which of the following will NOT occur?
A) Firms make only zero economic profit.
B) Firms' owners earn a normal profit.
C) The price equals the minimum average total cost.
D) Entrepreneurs want to enter this industry.
D
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The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007. Which of the following is TRUE of the United Kingdom's experience?
A) The increase in the price of oil immediately shifted the AS curve to the left. B) The financial crisis did not take hold right away so the AD curve did not immediately shift. C) Eventually, the Lehman Brothers bankruptcy caused a negative demand shock leading to a further fall in output and an increase in the unemployment rate. D) All of the above. E) None of the above.
The decline in the average number of hours worked over the last century from 60 hours to 40 hours can be explained as a consequence of
a. an increase in nonlabor income shifting labor supply to the left. b. an increase in nonlabor income shifting labor supply to the right. c. a decrease in the demand for labor. d. an improved understanding of the importance of sleep to labor productivity.
What happens to the monetary base if people, fearing a bank run, convert their checking deposits into currency holdings?
What will be an ideal response?
Institutions are
A) the same thing as organizations. B) associations of individuals or groups. C) always embodied in a written set of rules. D) a set of rules governing behavior, whether written or not.