Perfectly competitive firms are price takers
Indicate whether the statement is true or false
TRUE
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Milk can be used to make yogurt or cheese. Other things equal, if consumers start demanding more yogurt,
a. the price of milk will fall. b. less milk will be used in cheese and more will be used in yogurt. c. the supply of milk will decrease. d. the price of cheese will fall. e. all of the above.
The category of GDP called gross private domestic investment includes
A. all purchases of capital goods. B. all exports of goods and services. C. purchases made by private individuals. D. inventories held over from previous years.
Other things the same, if the money supply rises by 5% and people were expecting it to rise by 2%, then some firms have
a) lower than desired prices, which increases their sales. b) higher than desired prices, which increases their sales. c) higher than desired prices, which depresses their sales. d) lower than desired prices, which depresses their sales.
Total revenue will decrease when
A. the price elasticity of demand equals 1.20 and price rises. B. price and quantity change in opposite directions. C. the price elasticity of demand is negative. D. the price elasticity of demand equals 1.00 and price falls.