Answer the following statement(s) true (T) or false (F)
1. In long-run equilibrium, perfectly competitive firms make zero economic profits.
2. In a constant-cost industry, cost curves do not change as output changes.
3. In an increasing-cost industry, cost curves decrease as industry output increases.
4. External diseconomies of scale involve factors that are mostly within the firm’s control.
5. A decreasing-cost industry is one where input prices fall as industry output rises.
1. TRUE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
You might also like to view...
If two products are substitutes, then the:
A. cross-price elasticity of demand between them will be negative. B. income elasticity of demand for both will be high. C. price elasticity of demand for both will be positive. D. cross-price elasticity of demand between them will be positive.
Melissa purchases shares in a government bond mutual fund. Is this included in the aggregate demand component "Investment"?
a. Yes, if it is a domestic mutual fund. b. Yes, if the purchase is made out of current income. c. No, unless the funds are deposited in a domestic financial institution. d. No, it would never be included.
Ceteris paribus, an increase in consumers' income will result in: a. a decrease in demand for an inferior good
b. an increase in demand for an inferior good. c. a decrease in the quantity supplied of an inferior good. d. an increase in the quantity supplied of an inferior good.
The banking system currently has $10 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time buys $1 billion worth of bonds, then by how much does the money supply change?
a. It falls by $12 billion. b. It falls by $19 billion. c. It falls by $21 billion. d. None of the above is correct.