How might a monopolistically competitive firm continually earn economic profit greater than zero?
What will be an ideal response?
A monopolistically competitive firm can continually earn economic profit greater than zero only if it always stays one step ahead of the competition.
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In the United States since 1960, the price of health care services has increased but the price of health insurance has decreased
Indicate whether the statement is true or false
A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20% to 70% but the effort would cost him $5 . If the typical commission on a pair of shoes was $8, would he decide to work hard?
a. Yes because it is higher than what it costs him in effort b. Yes because it is higher than zero c. No, because it costs him more in effort d. None of the above
Which of the following is an implicit cost?
a. salaries paid to owners who work for their own firm b. interest on money borrowed to finance equipment purchases c. cash payments for raw materials d. wages paid to hourly employees e. foregone rent on office space owned and used by the firm
Both The Wealth of Nations and the Declaration of Independence share the point of view that
a. every person is entitled to life, liberty, and the pursuit of happiness. b. individuals are best left to their own devices without the government guiding their actions. c. the government plays a central role in organizing a market economy. d. because of human nature a strong legal system is necessary for a market system to survive.