Which of the following is TRUE of a monopoly?
A) It can always increase its revenue by increasing the price to its customers.
B) It will always operate somewhere along the inelastic portion of the demand curve.
C) Its marginal cost curve is always downward sloping.
D) None of the above is correct.
D
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Paul Romer's theory of economic growth differs from traditional theories in that
A) Romer argues an investment-knowledge cycle can exist, but requires constant increases in investment rates, while traditional theories argue that investment rates can be constant. B) Romer argues that investment in human capital always occurs before investment in physical capital, while traditional theories emphasize the priority of physical capital. C) Romer argues an investment-knowledge cycle allows a one-time increase in investment to permanently increase a country's growth rate, while traditional theory argued such an investment would have only a short-term effect. D) Romer argues that investment in capital goods is not important in encouraging growth while investment in human capital is, whereas traditional theorists emphasize both human and physical capital.
How does the long run differ from the short run in perfect competition?
a. In the long run, some firms will charge higher prices than others. b. In the short run, a firm seeks to maximize profit; in the long run it seeks to minimize cost. c. In the short run, a firm seeks to maximize profit; in the long run it seeks to maximize revenue. d. The long run is long enough to allow for the entry of new firms into the industry.