If the firms in a monopolistically competitive market are earning short-run economic profits, then
a. each existing firm will increase output in the long run as its marginal revenue curve shifts rightward
b. each firm will experience an increase in the demand for its output in the long run
c. each firm's profit will drop to normal in the long run as its demand curve shifts leftward due to entry of new firms
d. barriers to entry will enable them to earn economic profits in the long run
e. decreased demand for a key input will reduce that input's price in the long run and lower each firm's average total cost curve
C
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The economic analysis of minimum wage involves both normative and positive analysis. Consider the following consequences of a minimum wage:
a. The minimum wage law causes unemployment. b. Unemployment would be lower without a minimum wage law. c. Minimum wage laws benefit some workers and harm others. d. The minimum wage should be more than $7.25 per hour. Which of the consequences above are positive statements and which are normative statements? A) a and b are positive statements, c and d are normative statement. B) Only a is a positive statement, b, c, and d are normative statements. C) a and c are positive statements, b and d are normative statements. D) a, b, and c are positive statements and d is a normative statement.
In the graph above, which points reflect an interest parity arbitrage opportunity?
A) point A B) point B C) point C D) points B and C
Invention alone does not explain why free market societies have experienced such rapid rates of economic growth
a. True b. False Indicate whether the statement is true or false
Suppose the United States unexpectedly decided to pay off its debt by printing new money. Which of the following would happen?
a. People who held money would feel poorer. b. Prices would rise. c. People who had lent money at a fixed interest rate would feel poorer. d. All of the above are correct.