The assumption for perfect competition and monopolistic competition that enables economic profit to move towards zero is
A. freedom of entry and exit.
B. homogeneous products.
C. government involvement.
D. perfect Information.
Answer: A
You might also like to view...
According to the real business cycle theory, which of the following is a TRUE statement about the effects of an oil shock in the 1970s?
A) Relative prices changed but there was no impact on the price level in general. B) The natural rate of unemployment remained unchanged, but employment levels did decline. C) The shock shifted the short-run aggregate supply curve but not the long-run aggregate supply curve. D) The shock affected real variables only and did not affect nominal variables.
If potential output exceeds actual output, eventually:
A. input prices will rise and output will fall. B. input prices will fall and output will rise. C. both input prices and output will fall. D. both input prices and output will rise.
The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.ProductsProduction Possibilities?ABCDECapital Goods01234Consumer Goods22181370Refer to the table above. What is the opportunity cost of producing the first three units of capital goods?
A. 22 units of consumer goods B. 7 units of consumer goods C. 6 units of consumer goods D. 15 units of consumer goods
A socialist economy in theory:
A. requires private ownership of property. B. expects people to be selfish. C. expects people to be altruistic. D. is coordinated by the invisible hand.