Perfectly competitive markets are responsive to the demand of consumers.
Answer the following statement true (T) or false (F)
True
Competition forces firms to improve products and reduce prices because those firms that do not will be forced to shut down and perhaps exit the industry.
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When a taxed good is normal, using the (uncompensated) demand curve to estimate deadweight loss will over-state the actual deadweight loss.
Answer the following statement true (T) or false (F)
Economists
A) describe reducing tariffs and quotas as shallow integration. B) describe reducing tariffs and quotas as deep integration. C) believe that changing domestic policies affecting trade is a relatively simple process. D) believe that the work of reducing trade barriers is done since most tariffs are low and most quotas eliminated. E) believe the original motivation for nations forming domestic policies and regulations was to create trade barriers to foreign companies.
Draw a graph with food on the horizontal axis and shelter on the vertical axis.A. Now sketch in a budget line such that the relative price of food to shelter is 2, the absolute price of shelter is 10, and the nominal income level is $100. Label the budget line A.B. Next, the nominal income stays the same, the absolute price of shelter is cut in half, and the absolute price of food is unchanged. Sketch in the new budget line and label it B.C. Next, the absolute prices are where they were when the problem started and the nominal income increases to 150. Draw a new budget line for this data and label it C.D. Next, the nominal income is again $100, the relative prices are as they were at the beginning and the absolute prices are cut in half. Draw a new budget line on the graph and label it
D.E. Next, the absolute price of shelter falls to $5 and the absolute price of food and the income stay where it was at the beginning. The relative price of food to shelter also stays at 2. Explain why this is a logical contradiction. What will be an ideal response?
If the first copy cost of a music video is $223,000 and the marginal cost is $0, then how many copies should the firm sell in order to break even if the price was $10 each?
A. zero B. 2,230 C. 22,300 D. 223,000