Refer to Figure 23.6 for a perfectly competitive firm. Given the current market price, we expect to see
A. Firms exit from the industry, driving down the market price.
B. Firms enter the industry, driving down the market price.
C. Firms exit from the industry, driving up the market price.
D. No change in the number of firms in the industry and no change in the market price.
Answer: C
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Refer to Above Figure, an increase in population would be represented by a movement from
a. S1 to S2 b. D1 to D2 c. B to A d. B to C.
Use the following graph to answer the next question.
If the federal funds market is at equilibrium at point C and the Federal Reserve decides to conduct an open-market sale, then it must be trying to set a ________.
A. lower target federal funds rate by increasing the amount of reserves in the market B. higher target federal funds rate by increasing the amount of reserves in the market C. higher target federal funds rate by reducing the amount of reserves in the market D. lower target federal funds rate by reducing the amount of reserves in the market
High-skilled workers have
A) a lower value of marginal product because they have higher wages. B) the same labor supply curve as do low-skilled workers. C) more human capital than do low-skilled workers. D) None of the above answers is correct.
Strong patent laws encourage innovation and promote economic growth.
a. true b. false