A sudden decrease in the market demand in a competitive industry leads to
a. Losses in the short-run and average profits in the long-run
b. Above average profits in the short-run and average profits in the long-run
c. New firms being attracted to the industry
d. Demand creating supply
a
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An individual holds $10,000 in a non-interest-earning checking account, and the overall price level rises significantly. Other things being constant, we would expect
A) the individual's real wealth to decrease and consumption to decline. B) no change in the individual's real wealth but a decline in real national product. C) the individual's stock of real wealth to decrease but real national income to increase. D) the individual's wealth to increase.
A goldsmith has 100 gold coins in his safe and 100 receipts circulating. How much are his outstanding loans?
What will be an ideal response?
The law of one price states
A) federal and state statutes that prohibit price discrimination. B) that identical products should sell for the same price everywhere. C) that all customers should pay the same price. D) government regulation of prices for all firms.
If a price-taker industry is in long-run equilibrium, the market price in the industry will be just sufficient to cover the firm's average
a. total costs. b. fixed costs. c. variable costs. d. variable costs plus a 10 percent accounting profit.