Firms will continue to enter a competitive industry until:
a. the supply curve is vertical
b. the market price falls below average variable cost.
c. any economic profits have been competed away.
d. all resources are fully employed.
c
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If the inflation rate in 2013 was 2.5 percent, and because of that people expect the inflation rate in 2014 will also be 2.5%, these people are said to have
A) rational expectations. B) expectations of stagflation. C) adaptive expectations. D) expectations of supply shocks.
If people act as if they systematically pursue their own self-interest, then they will most likely
A) respond irrationally to any incentive. B) respond to a given incentive in a random manner. C) respond predictably to a given incentive. D) not respond to any incentive.
Can activities like driving faster than the speed limit or driving without wearing a seat belt be considered rational behavior? Why or why not?
Historically, when a diverse set of stocks is held over a lengthy time period, stocks have yielded a ____ rate of return, and the variation in the rate of return has been ____
a. low; low b. low; high c. high; low d. high; high