Suppose that firms in a monopolistically competitive industry are earning short-run economic profits. In the long run, the demand curve facing each individual firm can be expected to
a. shift to the left and become flatter
b. shift to the left and become steeper
c. shift to the right and become flatter
d. shift to the right and become steeper
e. remain constant
A
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The following is an example of risk aversion
a. those applying for a well-paid job tend to be the most qualified b. more reckless drivers opt for cars with more safety devices c. the contractor with the lowest bid for a is the most qualified d. Initial Public Offerings (IPOs) seek investors when prospects look good
Many economists believe that
A. once a negative income tax system was in place, the United States could increase economic equality indefinitely without reducing economic efficiency. B. a negative income tax would be less efficient than the current welfare system. C. replacing the current welfare system with a negative income tax would increase both economic efficiency and economic equality. D. None of the above is correct.