Question 1

When an economist states that a firm is earning zero economic profit, this statement implies that the firm

Accepted Answer

A) will be forced out of business unless market conditions change. 
B) is doing as well as it could in any other line of business. 
C) is earning a zero rate of return on its assets. 
D) could earn a higher rate of return in other industries. 
A) will be forced out of business unless market conditions change. 
B) is doing as well as it could in any other line of business. 
C) is earning a zero rate of return on its assets. 
D) could earn a higher rate of return in other industries.

Question 2

Suppose wheat farmers are price takers. If wheat farmers are currently making economic profits, over time we would expect that

Accepted Answer

A) existing wheat farmers would plant more acres of wheat. 
B) farmers growing other crops would switch some of their land from these crops to the growing of wheat. 
C) the wheat farmers will continue to earn economic profits because they would be driven out of business without such profit. 
D) both a and b are correct. 
A) existing wheat farmers would plant more acres of wheat. 
B) farmers growing other crops would switch some of their land from these crops to the growing of wheat. 
C) the wheat farmers will continue to earn economic profits because they would be driven out of business without such profit. 
D) both a and b are correct.

Question 3

The competitive market process tends to promote economic prosperity because it

Accepted Answer

A) keeps the prices of goods higher than their production costs. 
B) creates inefficiencies, which causes people to economize. 
C) directs self-interested action toward the production of goods that are highly valued relative to their cost. 
D) sends signals to the government about which goods to produce. 
A) keeps the prices of goods higher than their production costs. 
B) creates inefficiencies, which causes people to economize. 
C) directs self-interested action toward the production of goods that are highly valued relative to their cost. 
D) sends signals to the government about which goods to produce.

When an economist states that a firm is earning zero economic profit, this statement implies that the firm

Suppose wheat farmers are price takers. If wheat farmers are currently making economic profits, over time we would expect that

The competitive market process tends to promote economic prosperity because it

The Economic Approach

A: Some Tools of the Economist

B: Some Tools of the Economist

A: Supply, Demand, and the Market Process

B: Supply, Demand, and the Market Process

A: Supply and Demand: Applications and Extensions

B: Supply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Consumer Choice and Elasticity

A: Costs and the Supply of Goods

B: Costs and the Supply of Goods

A: Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

A: Price-Searcher Markets With High Entry Barriers

B: Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Appendix: Government Spending and Taxation

Appendix: the Economics of Social Security

Appendix: the Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Appendix: Great Debates in Economics: Keynes Versus Hayek

Appendix: the Crisis of 2008: Causes and Lessons for the Future

Appendix: Lessons From the Great Depression

Appendix: the Economics of Healthcare

Appendix:education: Problems and Performance

Appendix: Earnings Differences Between Men and Women

Appendix: the Question of Resource Exhaustion

Appendix: Do Labor Unions Increase the Wages of Workers

Appendix: Difficult Environmental Cases and the Role of Government

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Exam 9: B: Price Takers and the Competitive Process

When an economist states that a firm is earning zero economic profit, this statement implies that the firm

Suppose wheat farmers are price takers. If wheat farmers are currently making economic profits, over time we would expect that

The competitive market process tends to promote economic prosperity because it

The Economic Approach

A: Some Tools of the Economist

B: Some Tools of the Economist

A: Supply, Demand, and the Market Process

B: Supply, Demand, and the Market Process

A: Supply and Demand: Applications and Extensions

B: Supply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Consumer Choice and Elasticity

A: Costs and the Supply of Goods

B: Costs and the Supply of Goods

A: Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

A: Price-Searcher Markets With High Entry Barriers

B: Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Appendix: Government Spending and Taxation

Appendix: the Economics of Social Security

Appendix: the Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Appendix: Great Debates in Economics: Keynes Versus Hayek

Appendix: the Crisis of 2008: Causes and Lessons for the Future

Appendix: Lessons From the Great Depression

Appendix: the Economics of Healthcare

Appendix:education: Problems and Performance

Appendix: Earnings Differences Between Men and Women

Appendix: the Question of Resource Exhaustion

Appendix: Do Labor Unions Increase the Wages of Workers

Appendix: Difficult Environmental Cases and the Role of Government

Filters