High profits in a particular industry indicate that
A. Consumers want more of that industry's goods.
B. Consumers are satisfied with the level of production of that industry's goods.
C. Consumers want less of that industry's goods.
D. Producers are satisfied with the level of production of that industry's goods.
Answer: A
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Firms exit a competitive market when they incur an economic loss. In the long run, this exit means that the economic losses of the surviving firms
A) increase. B) decrease until they equal zero. C) decrease until economic profits are earned. D) do not change. E) might change but more information is needed about what happens to the price of the good as the firms exit.
The state is considering adding a satellite campus to its major university. How can marginal analysis assist, even though the university does not attempt to maximize profits?
Do any of the fundamental factors depend on the rate of inflation?
A. Yes, but only in the long run. B. Yes, both in the short and long run. C. No, not even in the short run. D. No, at least not in the long run.
The dispute over the pay of chief executive officers (CEOs) of U.S. corporations hinges on whether or not such pay:
A. should be granted for past performance or for current performance. B. is determined in a competitive labor market or in a monopsonistic labor market. C. is justified on productivity grounds or mainly reflects an overestimation of CEO importance by corporate boards of directors. D. should contain performance incentives such as stock options, stock shares, or bonuses.