If a farmer earns a larger profit than the "normal profit" by producing a special type of vegetable that becomes popular,
A. the farm's owners are likely to withdraw from the industry in order to retire early.
B. the firm will continue to earn its "normal profits" far into the future.
C. other farmers are likely to plant the same vegetable, pushing up the prevailing market price.
D. other farmers are likely to plant the same vegetable, pushing down the prevailing market price.
Answer: D
You might also like to view...
Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans shot up 44 percent in 2008. How did this affect Rogue's short run costs?
A) Short run variable costs would increase. B) Short run fixed costs would decrease. C) Short run total costs would decrease. D) Short run average fixed costs would increase.
In a production possibilities frontier model, a point ________ the frontier is productively inefficient
A) outside B) at either intercept of C) inside D) along
Output and inflation movements can arise from either demand or supply shifts. How can we tell them apart?
What will be an ideal response?
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the
Three-Sector-Model? a. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency falls. b. The quantity of real loanable funds per time period falls, and nominal value of the domestic currency rises. c. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency remains the same. d. The quantity of real loanable funds per time period falls, and nominal value of the domestic currency falls. e. There is not enough information to determine what happens to these two macroeconomic variables.