Mr. Stewart owns the only hardware store in a small Midwestern town. His nearest competition is more than 50 miles away, yet he does not earn any economic profit. Does someone need to explain the economic concept of monopoly to him?
Most likely, Mr. Stewart is aware of the potential for competition. Entry into the hardware market would be relatively inexpensive for a potential competitor. Economic profit would make entry into this market attractive. Because of this, he has an incentive to price competitively.
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Why is the short run labor demand curve less elastic relative to the long run labor demand curve?
A. Labor is a normal good. B. Isoquant lines get shallower when the wage increases. C. Firms care about changes in wages in the short run but not in the long-run. D. A perfectly competitive firm can always pay lower wages in the long run. E. Firms are better able to substitute capital for labor in the long run compared to the short run.
After the formation of North American Free Trade Agreement (NAFTA), Mexico became a more attractive country for business investments of foreign firms.
Answer the following statement true (T) or false (F)
Congress commissioned a study to determine what the poverty level or minimum level for subsistence should be for the U.S. population. What branch of economics does this represent?
A) Normative economics B) Positive economics C) Microeconomics D) Macroeconomics
Federal government receipts minus expenditures is the federal surplus or deficit.
Answer the following statement true (T) or false (F)