A perfectly competitive market is in long-run equilibrium. Then demand decreases. The decrease in demand leads to
A) a rise in the price in the short run.
B) the firms' incurring an economic loss in the short run.
C) firms entering the market in the long run.
D) none of the above
B
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The principle of exclusion works well in organizing _______ unions, while the principle of inclusion works well in organizing _______ unions.
Fill in the blank(s) with the appropriate word(s).
An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. ________ has the comparative advantage in computers and ________ has the comparative advantage in shirts.
A. Ricardo; Paula B. Paula; Ricardo C. Paula; Paula D. Ricardo; Ricardo
Both monopolistically competitive firms and perfectly competitive firms maximize profits
A) by producing where price equals average total cost. B) by producing where marginal revenue equals average revenue. C) by producing where marginal revenue equals marginal cost. D) by producing where price equals average variable cost.
Suppose a firm sells its product at a price lower than the opportunity cost of the inputs used to produce it. Which of the following statements is definitely true?
A. The firm will earn positive accounting and economic profits B. The firm will face accounting and economic losses C. The firm will face an accounting loss, but earn positive economic profits D. The firm may earn positive accounting profits, but will face economic losses