Assume the firms in a perfectly competitive industry are initially in long-run equilibrium and the cost of labor increases. How will the market adjust over time?
A) Firms will enter the market, causing price to rise until losses are eliminated.
B) Firms will enter the market, causing price to fall until positive profits are eliminated.
C) Firms will exit the market, causing price to rise until losses are eliminated.
D) Firms will exit the market, causing price to fall until positive profits are eliminated.
C
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Economies where production and distribution decisions are made by the government are called
A) command economies. B) market economies. C) mixed economies. D) capitalist economies.
An economy that does not have interactions in trade or finance with other economies is referred to as
A) a closed economy. B) an open economy. C) a net foreign investment economy. D) a trade-balanced economy.
Which of the following would most likely increase the demand for televisions?
a. A decrease in the price of televisions. b. A decline in consumer income. c. A decrease in the price of home stereo systems, a substitute for televisions. d. A decrease in the price of DVD players, a product that is complementary with televisions.
Other things remaining the same, if a large part of the population decided against having soda for health reasons, there would be a(n):
a. increase in the quantity of soda supplied. b. increase in the quantity supplied of complements like fries and burgers. c. decrease in the price of soda. d. rightward shift of the demand curve for soda. e. decrease in the quantity demanded of substitutes like mineral water.