When would you expect economic profits in an industry to be zero?
a. When firms are entering the industry
b. When firms are leaving the industry.
c. When existing firms are growing.
d. When firms have no incentives to enter or exit.
d
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A model or theory in economics is:
A) based mostly on value judgments. B) built using relevant observations, assumptions, and abstractions. C) only useful if it correctly portrays the real world and its complexities. D) useful only if it is based on normative economic statements.
Which of the following would decrease net exports in the United States?
A) A Mexican citizen purchases 100 shares of stock in IBM. B) The U.S. government donates $25 million to Mexico to help victims of a hurricane in Mexico. C) An American party planner purchases 350 piñatas from Mexico. D) The government of Mexico purchases 2,000 Dell laptop computers from the United States.