Explain why individual firms in competitive markets face more elastic demand curves than the market as a whole
What will be an ideal response?
In a competitive market, if an individual firm increases its price it will lose all of its customers, as consumers simply buy from another firm. However, if the price of the good increases for all firms some consumers will not continue to buy the good, but for many prices some consumers will continue to purchase the good.
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An isoquant identifies all of the combinations of two inputs that result in the same total costs of production
Indicate whether the statement is true or false
Imagine the exchange rate between the British pound (£) and the U.S. dollar ($) is fixed at $1.40/£ and capital flows freely between Great Britain and the U.S. Explain what the price of shares of stock in XYZ Inc. would be selling for in London if they are $80 per share in the U.S. and why.
What will be an ideal response?
Below is a table showing the maximum amount five potential buyers are willing to pay for a car.
a) What is the quantity demanded if cars sell for $10,000 each? b) Under conditions of perfect competition, how many cars are bought if the marginal cost of producing a car is $25,000? c) How many cars are bought if the marginal cost of producing a car falls to $20,000?
Official GDP numbers do not include the activity of the ________ economy, which includes illegal activities and off-the-book transactions.
A. laissez-faire B. unofficial C. underground D. barter