Which of the following is consistent with a competitive market?
A.) A small number of firms
B.) Exit of small firms when profits are high for large firms
C.) Zero economic profit in the long run
D.) Marginal revenue lower than price for each firm
C.) Zero economic profit in the long run
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Danny has $12 to spend on two goods: pies and soda. The price of a pie is $4, and the price of a can of soda is $2. To maximize his utility, Danny buys ________
A) the combination that gives him equal total utility from pies and soda B) 2 pies and 2 cans of soda C) only sodas because they are less expensive D) the combination that gives him the same marginal utility per dollar spent on pies as on soda
List four things that can shift the demand for an input
What will be an ideal response?
Internal economies of scale means that
A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs. B) firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market. C) consumers will have less choices once trade begins, because firms will be squeezed out of the market. D) simply expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output.
Milton Friedman's theory of the demand for money
A) is similar to Tobin's portfolio approach to the demand for money. B) includes permanent income as one of the significant variables. C) includes the yields on competing nonmonetary assets. D) All of the above.