Suppose that a firm in an industry subject to diminishing returns to scale is initially in long run equilibrium. Which of the following will not be part of the industry adjustment process to a permanent increase in demand?
a. Some firms will temporarily make economic profits
b. Some new firms will enter.
c. The long run equilibrium price will be higher than the initial equilibrium price.
d. All of the above will be consequences.
d
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What is most likely to happen to the cost of owning and operating a golf course in a large city when the population grows?
A) The cost will decline because the course will be used closer to its capacity. B) The cost will not change as long as no attempt is made to enlarge the course. C) The cost will rise because the land will become more valuable for other purposes. D) The cost will rise if the course is privately owned but will be unchanged if the course is municipally owned. E) The cost will vary depending on the amount of competition from other courses.
Which is NOT an example of signaling high quality in a social setting
a. wearing a business suit on a job interview b. leaving a big tip for the waiter after a dinner date c. offering an expensive engagement ring to your bride d. Doing messy chores before a big date