In its long-run equilibrium, a firm in monopolistic competition
A) makes zero economic profit and operates with excess capacity.
B) makes zero economic profit and produces above capacity output.
C) makes a positive economic profit and operates with excess capacity.
D) makes a positive economic profit and produces above capacity output.
A
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Relative to Al, Joe has ________ if Joe can produce a good at a lower opportunity cost than Al
A) a marginal benefit B) a comparative advantage C) more production efficiency D) a free lunch E) a comparative benefit
Based on the Saving-Investment Diagram, the difference between values H and E could measure the net capital inflow, if ________
A) the difference between values H and D measures the trade surplus B) the domestic real interest rate is indicated by A C) desired saving has increased D) desired investment has decreased E) none of the above
If price is initially above the equilibrium level,
A) the supply curve will shift rightward. B) the supply curve will shift leftward. C) excess supply exists. D) all firms can sell as much as they want.
The adoption of modern technologies and business methods have the possibility to improve economic performance in a nation with low per capita income and low growth, but only if
a. its natural resources are sufficient. b. its workers become educated rapidly enough. c. it improves its institutions, making them sound enough to attract capital and entrepreneurial activity. d. its government has enough skilled planners to properly deploy new capital.