Which of the following statements concerning a monopolistically competitive industry is correct?
A. If there are short-run losses, firms will leave the industry and the demand curves of the
remaining firms will shift to the right.
B. If there are short-run economic profits, firms will enter the industry and the demand curves
of existing firms will shift to the right.
C. If there are short-run losses, firms will leave the industry and the demand curves of the
remaining firms will shift to the left.
D. If there are short-run economic profits, firms will leave the industry and the demand curves
of the remaining firms will shift to the right.
Answer: A
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Refer to Figure 1A.1. Assume that the graph in this figure represents the demand and supply curves for walnuts. An advance in production technology which makes harvesting walnuts less time consuming would be represented by a shift from
A) Demand 1 to Demand 2. B) Demand 2 to Demand 1. C) Supply 1 to Supply 2. D) Supply 2 to Supply 1.
The long-run Phillips curve is
A) vertical. B) horizontal. C) upward sloping. D) downward sloping.
By the accelerator hypothesis, if a firm's actual sales jump in one period to a higher maintained level, that firm's replacement investment
A) also jumps in one period to a higher maintained level. B) gradually drifts upward to a higher maintained level. C) jumps upward and then falls back to zero. D) jumps upward and then falls back part of the way.
"Throwing good money after bad" is also known as the _____ effect
a. anchoring b. sunk-cost c. status quo d. familiarity e. overconfidence