In August 2008, Ethan Nicholas Developed the IShoot Application for the Apple

question 9

Multiple Choice

In August 2008, Ethan Nicholas developed the iShoot application for the apple iPhone 3G, and within five months had earned $800,000 from this program. By May 2009, Nicholas had dropped the price from $4.99 to $1.99 in an attempt to maintain sales. This example indicates that in a competitive market,

• A) earning an economic profit in the long run is extremely easy.
• B) earning an economic profit in the long run is extremely difficult.
• C) it is impossible to earn an economic profit in either the short run or the long run.
• D) economic profits are only earned in the long run.

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Definitions:

General Intelligence

The theory that one common factor underlies intelligence.

Crystallized Intelligence

Intelligence that reflects both knowledge gained through experience and the ability to use that knowledge.

Fluid Intelligence

Intelligence that reflects the ability to process information, particularly in novel or complex circumstances.

Mental Set

A psychological tendency to approach problems in a specific way, using methods that have been successful in the past.