In the dominant firm model, the fringe firms
A) are price takers.
B) maximize profit by equating average revenue and average cost.
C) determine their price and output before the dominant firm determines its price and output.
D) all of the above
E) none of the above
A
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The "new classical" economics took advantage of the disarray and partial eclipse of Keynesian economics to reestablish macro model-building based on the assumption of price ________ and market ________
A) flexibility, clearing B) flexibility, non-clearing C) stickiness, clearing D) stickiness, non-clearing
People are willing to invest in human capital because
a. the demand for skilled labor is higher than for unskilled labor. b. it increases the marginal product of their labor. c. firms are willing to pay more for more productive workers. d. All of the above are correct.
The quantity demanded of money is
A) inversely related to the interest rate. B) directly related to the interest rate. C) inversely related to the general price level. D) inversely related to GDP. E) a, c, and d
Which of the following would not be hurt by unanticipated inflation?
A. Those living on fixed nominal incomes B. Those who find inflation rising more rapidly than their nominal incomes C. Those who have money savings D. Those who became debtors when inflation was lower