Rent-seeking activity by firms
A. often wastes economic resources.
B. increases economic efficiency.
C. continues even when an industry is in long-run competitive equilibrium.
D. increases the total amount of economic rent available.
Answer: A
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
How can a consumer's demand for a good be derived using indifference curve analysis?
What will be an ideal response?
One important difference between the international economy of today and the economy of 100 years ago is
A) that labor is so much more mobile. B) for the first time, technological innovations have reduced the barrier of distance. C) for the first time, capital is mobile. D) that price differences in different markets have narrowed. E) the presence of international bodies such as the IMF and World Bank.
Which of the following is false about the long run? a. The long-run equilibrium output for a firm in perfect competition occurs at the lowest point on the average total cost curve. b. The shape of the long-run supply curve depends on the extent to which input costs change when there is entry or exit of firms in the industry. c. In a constant-cost industry, the prices of inputs do not change as
output is expanded. d. In an increasing-cost industry, the cost curves of the individual firms rise as the total output of the industry decreases.