In a perfectly competitive labor market, firms are price takers.
Answer the following statement(s) true (T) or false (F)
Answer: True
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Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP. How can we measure potential GDP?
What will be an ideal response?
Explain what social overhead capital is
What will be an ideal response?
If a firm is a price taker, then it can
a. sell below the market price and increase its economic profit b. sell all it wants at the market price c. sell above the market price and increase its economic profit d. supply the entire market e. choose its own price
Why is it difficult for economists to predict the price and output policy that will emerge in oligopolistic markets?
a. Economists cannot determine if barriers to entry exist in a market. b. Economists cannot predict the reactions that firms will have to the actions and decisions of other firms. c. The government prevents economists from acquiring the information that would lead to good predictions. d. Firms have a set price and output policy, but the policy is concealed to discourage competition.