In a Perfectly Competitive Market That Is in Long-Run Equilibrium

question 144

Multiple Choice

In a perfectly competitive market that is in long-run equilibrium, a permanent leftward shift in the market demand curve

• A) raises the price in the short run.
• B) raises profits in the short run.
• C) leads to firms leaving the market in the long run.
• D) raises the price at first but then returns it to its original level in the long run.

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Definitions:

Castration Anxiety

A concept in psychoanalytic theory referring to a child's fear of losing their genitalia, believed to play a role in the development of certain complexes and behaviors.

Behaviourism

A psychological approach to understanding abnormal behaviour devised by John B. Watson (1858–1935), which declared that psychology must be restricted to the study of observable features, that is, the behaviour of organisms. Watson considered abnormal functioning to be learned and so believed it could be unlearned. His model for learning was derived from Ivan Pavlov’s (1849–1936) studies of classical conditioning.

Classical Conditioning

A learning process where a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit similar responses.

Watson

John B. Watson, an American psychologist who established the psychological school of behaviorism.