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Dmitry [639]
3 years ago
14

A student in a principles of economics course makes the following​ remark: ​"The economic model of perfectly competitive markets

is fine in theory but not very realistic. It predicts that in the long​ run, a firm in a perfectly competitive market will earn no profits. No firm in the real world would stay in business if it earned zero​ profits." Is this remark correct or​ incorrect?
Business
1 answer:
DochEvi [55]3 years ago
8 0

Answer:

The remark is incorrect.

Explanation:

The student says that firms in a perfectly competitive market earn zero profits in the long run which does not apply to the real world. The firms in the real-world will not operate at zero profits.

The student is getting confused between accounting profit and economic profit. Zero profit here implies zero economic profit. The firms will still be earning positive accounting profits.

Accounting profit is the difference between total revenue and explicit cost while economic profit is the difference between total revenue and both explicit and implicit cost.

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gavmur [86]

A tax cut that will last for only a year will not have a huge effect on the aggregate demand as the aggregate demand increases only when the tax cut is permanent.

The given statement is false.

<h3>What is a tax?</h3>

A tax is a liability imposed on the taxpayer to pay a specified sum to the government based on the income they have earned in the previous year.

When the cutting of taxes becomes permanent in the country, then the citizens can start to acquire more which will increase the spending. The families will expect that the tax cuts are for the longer term which now induces them to buy and spend more and also act as an addition to their incomes. This whole impact would eventually lead to rising in aggregate demand.

Therefore, the demand increases when the tax cuts are permanent rather than when tax cuts are for only one year.

Learn more about the tax cut policies in the related link:

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5 0
2 years ago
John is going to buy a car. He wants a used Honda. The salesmen shows him one from 2012. John's not really positive how much the
m_a_m_a [10]

Answer:

anchoring bias

Explanation:

In business, anchoring bias happens when a consumer relies on pre-existing information (in this case sales price) to make their purchasing decisions. E.g. a sales promotion where a before price is set as the anchor to show that the after price (with the discount) is a really good deal.

In this case, John started to negotiate a sales price using the sticker price as an anchor, and ended up making a good deal because he got a $2,000 discount.

4 0
3 years ago
Decision makers can help the community recover from an event more quickly by:
maria [59]

Answer: D

Explanation:

The ability to make sound, timely decisions during an emergency is critical. Effective decision making can ,Avoid tragedy ,help manage incidents.

build community trust and support.

help the community recover from an event more quickly. Conversely, poor decision making or the absence of decisions potentially can result in injury or death to victims and/or responders.

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3 years ago
Valley Orchards just paid a dividend of $1.2 per share on its stock. The dividends are expected to grow at a constant rate of 3.
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4. What factors could give K to 12 graduates an advantage in the labor market?
Discussion Questions
1.
What is the dilemma K to 12 graduates face when applying for a job?
their company? Pa help asap po 2. How 2. How should employers respond to K to 12 graduates who apply for vacant positions in
3. What were the perceived disadvantages of K to 12 graduates pcompared to college students?
4. What factors could give K to 12 graduates an advantage in the labor market?
Discussion Questions
1.
What is the dilemma K to 12 graduates face when applying for a job?
their company? Pa help asap po should employers respond to K to 12 graduates who apply for vacant positions in
3. What were the perceived disadvantages of K to 12 graduates pcompared to college students?
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3 years ago
If economic activity increases, it follows that economic welfare:
grigory [225]
Probably goes either way 
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3 years ago
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