Why cannot firms leave the industry in the short run?
What will be an ideal response?
In the short run, the firm has at least one input that is fixed. Therefore, while the firm can shut down in the short run, it cannot get rid of its fixed costs. Fixed costs must be paid in the short run.
Economics
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Compensation of losers from opening an economy to international trade is not common because:
A) losers don't lose so much that they would require to be compensated. B) the loss is made up through the availability of a wider array of goods and services. C) it is difficult for governments to carry out such compensation policies. D) the government will have to transfer huge amounts of money to compensate losers.
Economics
Use "wars of attrition" to explain the debate about deficit reduction
What will be an ideal response?
Economics