If perfectly competitive industry B is currently realizing economic profits, we would expect that:
a. industry output will fall, good B will fall in price, and economic profits will tend to disappear.
b. industry output will fall, good B will rise in price, and economic profits will tend to disappear.
c. industry output will rise, good B will fall in price, and economic profits will tend to disappear.
d. industry output will rise, good B will fall in price, and economic profits will tend to increase.
Question 2
Individuals have a tradeoff between leisure and work. When income from working is taxed, the cost of leisure is reduced in relative terms.
a. True
b. False
Indicate whether the statement is true or false
