The monopolist, unlike the perfectly competitive firm, continues to earn an economic profit in the long run because
a. it can charge a higher price than its competitors and not lose market share
b. it can innovate, using its profit as research investment
c. it can out-compete its competitors
d. it has considerable market share
e. of impossible-to-overcome barriers to entry
E
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Economists define investment to include purchases of
A) capital goods and inventories. B) capital goods, equity stocks, and inventories. C) capital goods, equity stocks, and bonds. D) capital goods, such as tools, instruments, and buildings. E) capital goods, household durable goods, and inventories.
The income elasticity of demand is a measure of
A) how demand for a product changes when the price of a substitute or complement product changes. B) how responsive consumers are to changes in the price of a product. C) how responsive suppliers are to changes in the price of a product. D) the extent to which the demand for a good changes when income changes. E) the extent to which the supply of a good changes when the demand changes as a result of a change in income.
If a firm has invented a new cancer drug, the firm would seek which of the following to protect their intellectual property?
A) a patent B) a trademark C) a trade secret D) a copyright
Suppose the Organization of Petroleum Exporting Countries (OPEC) sharply increased the price of oil, which triggered higher inflation rates in the United States. This type of inflation is best classified as:
a. pseudo-inflation. b. demand-pull inflation. c. cost-push inflation. d. hyperinflation.