In a perfectly competitive market, a given short-run equilibrium cannot persist into the long run unless the firms are earning (suffering)
a. above-normal profits
b. below-normal profits
c. economic losses
d. economic profits
e. just enough profit to cover all the owners' opportunity costs
E
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In the 1980s, one of the most common sights in the socialist countries, such as the former Soviet Union and North Korea, were long lines for bread, sugar, and other necessities. These countries had price ceilings on these necessities
Some of the socialist nations, such as the former Soviet Union, have moved to a market economy by lifting the price ceilings, while others, such as North Korea, have retained their price ceilings. What prediction do you make about the presence (or absence) of long lines today in the former Soviet Union and North Korea? Explain your answer.
Refer to the demand and supply equations. At a price of $5, there will be ________
Fill in the blank(s) with correct word
If a perfectly competitive firm is producing at an output at which marginal cost exceeds marginal revenue
A) price will be at the profit maximizing level. B) sales will be at the profit maximizing level. C) the firm should expand production. D) the firm should reduce production.
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's risk level rises relative to England and nothing else changes, then
a. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate. b. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing an appreciation of the Swiss franc. c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc. d. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. e. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc.