In the short run, a perfectly competitive firm's economic profits
A) must equal zero, that is, the firm earns a normal profit.
B) must be positive.
C) might be positive, negative (an economic loss), or zero (a normal profit).
D) must be negative, that is the firm must incur an economic loss.
C
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Assume the development of a new technology that allows widgets to be produced for less. Also, assume that widgets are a key input in the production of whatchamacallits. As a result of this new technology, what would an economist expect to happen in the market for whatchamacallits?
a. the demand curve will shift to the left b. the supply curve will shift to the left c. the demand curve will shift to the right d. the supply curve will shift to the right e. none of the above
Other things equal, expected income can be used as a direct measure of well-being
A) always. B) no matter what a person's preference to risk. C) if and only if individuals are not risk-loving. D) if and only if individuals are risk averse. E) if and only if individuals are risk neutral.