If we observe firms earning zero economic profits in the short run, we know that
A. the industry must be perfectly competitive.
B. there must not be any barriers to entry.
C. any market structure is possible since firms under any market structure can earn zero profits at some time.
D. the industry must be either perfectly competitive or monopolistically competitive.
Answer: C
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A graph showing the values of an economic variable for different groups in a population at a point in time is called a
A) cross-section graph. B) time-series graph. C) scatter diagram. D) Venn diagram. E) None of the above answers is correct.
Barter requires a double coincidence of wants. This means that:
a. at least two traders must demand a commodity. b. any two traders involved in a transaction must have money. c. each trader must demand at least two commodities. d. either of the two traders involved in a transaction must have money. e. when two traders are involved in a transaction each trader must want what the other has to offer.
Consider the supply of orange juice. If the price of orange juice rises, which of the following occurs?
a. Producers of orange juice are satisfied with their revenue and leave production unchanged. b. Producers of orange juice decrease the quantity of orange juice that they produce. c. Producers of orange juice go out of business, and the supply of orange juice shifts to the left. d. Producers of orange juice increase their production of orange juice.
Which of the following decreases the demand for money?
A) an increase in income B) a decrease in real GDP C) an increase in the price level D) expectations of higher bond prices