In Figure 5.8, if the supply curve moves from S1 to S3,
A. the firm will go from making an economic profit to a loss.
B. the firm will make a smaller economic profit than they used to.
C. the firm will go from making normal profits to a loss.
D. the firm will go from making an economic profit to a normal profit.
Answer: D
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Suppose two variables are directly related. If one variable rises, then the other variable:
a. remains unchanged. b. falls. c. also rises. d. reacts unpredictably.
Which of the following statements is false?
A) Not all economists are agreed as to whether government should bail out companies in financial trouble. B) Not all economists prefer a rule-based monetary policy to discretionary monetary policy. C) Rule-based monetary policy advocates often assert that discretionary monetary policy can be motivated by politics. D) The tax multiplier is always larger than the government spending multiplier.