Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer
What will be an ideal response?
A perfectly competitive producer has no incentive to lower its price because the producer can sell all he or she produces at the going market price. In this case, a producer will not lower the price he or she charges because no additional sales can be garnered. Hence it is nonsensical to undercut the market price because the lower price means lower revenue and hence lower profit.
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An AIDS epidemic hurts an economy by
a. requiring additional expenditures on health care b. reducing the working-age population c. increasing the child mortality rate d. reducing the growth of output e. all of the above
If the exchange rate is 1.25 New Zealand dollars per U.S dollar, the price of apples is $2 a pound in the U.S. and 1 New Zealand dollar per pound in New Zealand, what is the real exchange rate?
a. 2.50 b. 2 c. 1.25 d. .75
Why were there so few strikes from 1942-1945?
A. Unions were too weak to strike. B. Union members were afraid that their employers would move their factories to other countries. C. It was considered unpatriotic to strike while we were at full-scale war. D. Labor leaders were afraid that strikes would force financially weak employers out of business.
Which one of the following is an example of a positive statement?
A) Farmers need some type of government aid. B) State governments should provide economic assistance to farmers. C) The federal government should provide economic assistance to farmers. D) The amount of financial assistance given to farmers is higher this year than it was 10 years ago.