In the long run, zero economic profit exists in monopolistic competition and perfect competition
a. True
b. False
Indicate whether the statement is true or false
True
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The process by which individuals limit their productive efforts to a particular activity instead of trying to produce directly everything that they need is known as
a. specialization. b. using absolute advantage. c. using exchange. d. scarcity.
In the new classical model, the aggregate supply schedule depends on
a. the expected level of the money stock. b. the expected price level. c. the expected values of fiscal policy variables and other possible determinants of aggregate demand. d. Both a and c e. All of the above
If the level of excess reserves in the banking system drops suddenly, we might expect that the:
A. required reserve ratio would fall. B. federal funds rate would rise. C. discount rate would rise. D. prime rate would fall.
If the marginal revenue product of an input exceeds the marginal factor cost of the input, the firm
A. should increase its use of the input. B. is maximizing profit. C. is not on its marginal cost curve. D. should hire less of the input.