In the long run, assuming that the owner of a firm in a competitive industry has positive opportunity costs, she
a. should exit the industry unless her economic profits are positive.
b. will earn zero accounting profits but positive economic profits.
c. will earn zero economic profits but positive accounting profits.
d. should ignore opportunity costs because they are a type of sunk cost that disappears in the long run.
c
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If barbers in Mexico are just a productive as their counterparts in the United States then why do they earn lower wages?
What will be an ideal response?
A larger budget surplus
a. raises the interest rate and investment. b. reduces the interest rate and investment. c. raises the interest rate and reduces investment. d. reduces the interest rate and raises investment.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
When disposable income is 3750, induced consumption is
A. -500.
B. 0.
C. 500.
D. 750.