Perfectly competitive firms maximize their profit by producing the output level where P = MR = AVC.
Answer the following statement true (T) or false (F)
False
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If the Fed has announced that it plans on lowering the interest rate it will
A) engage in contractionary open market operations, thereby increasing the money supply. B) engage in contractionary open market operations, thereby decreasing the money supply. C) engage in expansionary open market operations, thereby decreasing the money supply. D) engage in expansionary open market operations, thereby increasing the money supply.
In a Cournot oligopoly, the ________ firms in the market, the ________ the equilibrium quantity and the ________ the equilibrium price.
A) less; larger; lower B) less; smaller; lower C) more; larger; lower D) more; smaller; higher
Using Figure 3 below the distance between what 2 lines illustrate an inflationary expenditure gap?
A. PAE2 to PAE3
B. PAE1 to PAE2
C. Y1 to Y2
D. Y2 to Y3
Consider two perfectly competitive labor markets for jobs that require different skills but are otherwise equivalent. One job currently pays a higher wage than the other job. This wage differential
a. cannot persist in the long run b. can persist only if there are significant differences in the nonmonetary characteristics of the two jobs c. can persist if workers in the lower-wage job lack the ability to gain the skills needed for the higher-wage job d. will be eliminated as labor supply to the higher-wage job increases e. is likely unrelated to different workers' endowments of talent and intelligence