Perfectly competitive firms are earning economic profits at a market price of $18 and an average total cost of $15. If new firms enter and increase the average total cost for all firms, the market price will ________ until ________.
A) fall; it reaches the new lower average total cost
B) increase; it reaches the new higher average total cost
C) fall; it reaches the new higher average total cost
D) increase; economic profits are equal to zero
C) fall; it reaches the new higher average total cost
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Capital controls are most often aimed at slowing or eliminating movements of
A) reserve assets. B) foreign direct investment. C) foreign portfolio investment. D) nonreserve government assets.
If the dollars per pound exchange rate falls, there is a(n)
a. rightward movement along a single supply of pounds curve b. leftward movement along a single supply of pounds curve c. leftward shift of the supply of pounds curve d. rightward shift of the U.S. supply of pounds curve e. tendency for the U.S. supply of pounds curve to become steeper