Economics

Dinah-Lee Torres Nightly Problems Chapter 7 & 8 1) True or absurd: explain why the following statements atomic number 18 honest or false: a. The economical maxim there is no property on the table means that there are neer any fallow economic opportunities. False. There are unexploited economic opportunities in the short mental test because the draw play of ordained economic proceedss. b. Firms in competitive environments make no  accountancy profit when the market is in long run equilibrium. False. Firms in competitive environments make positive accounting profit in the long run and no economic profit in the long run c. Firms that stinkpot introduce comprise saving innovations can make an economic profit in the short run. True. In the short run, market terms of goods digest not been set yet so firms experience a decrease in take apostrophize due to cost saving innovations, and as a result it creates higher economic profit. 2) Why do set ceilings crop economic excess?

Price ceilings reduce economic surplus by squander manufacturer surplus and preventing any additional surplus for the consumers. It reduces maker surplus because the producer cant sell at equilibrium price which causes the value of production to be pressure down. This creates less production of the regulated item. For consumer surplus, the very low price of the product provide drive demand up simply with the decrease in supply for the product, the consumer will be ineffective to consume much of that good. Price ceilings therefore create unused weight dismission because of all the product that isnt macrocosm utilized.If you! want to press a full essay, order it on our website: OrderCustomPaper.com

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