To determine the optimal method of production for a good or service, a perfectly competitive firm needs to know all of the following except
A. the prices charged by its rivals.
B. the prices of inputs.
C. the technologies of production that are available to the firm.
D. the market price of output.
Answer: A
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In an oligopoly
A) there are only a few firms. B) there is no product differentiation. C) there is free entry and exit. D) firms' decisions are unrelated to each other.
Jim, an avid biker, broke his leg last year and will never be able to use his bike again. He was offered $100 for it last year, but Jim refused to sell it, insisting it was worth more. A year later, he's offered only $75 for it, but Jim still refuses to sell it. Jim's behavior could be explained by:
A. limited processing power. B. the endowment effect. C. status quo bias. D. substitution effect.
In the financial crisis of 2008, which of the following were not among the consequences of high leverage in the banking industry? a. Less investment was undertaken than would otherwise have been the case
b. Less consumption spending took place than would otherwise have been the case. c. Unemployment was lower than it would otherwise have been. d. Real GDP was lower than it otherwise would have been
The phase in the business cycle in which real GDP begins to decline is called a
a. trend b. peak c. downturn d. recovery e. trough