The essential feature that differentiates imperfectly competitive firms from perfectly competitive firms is that an imperfectly competitive firm:
A. coordinates their output decisions with other firms.
B. produces a good with no close substitutes.
C. faces a downward-sloping demand curve.
D. faces high barriers to entry.
Answer: C
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Government purchases are defined as
A) only goods purchased by federal, state, or local governments. B) all goods and services purchased by the federal government. C) all goods and services purchased by the federal or state government. D) all goods and services purchased by the federal, state, or local government. E) goods and services purchased from the government.
The fact that the production function relating output to labor becomes flatter as we move from left to right means that
A) the marginal product of labor is positive. B) the marginal product of capital is positive. C) there is diminishing marginal productivity of labor. D) there is diminishing marginal productivity of capital.
The term "sovereign debt crisis" applies when ________
A) private businesses cannot borrow money because the government is borrowing so much B) nations compete fiercely with each other to increase their borrowing C) a government finds that the cost of borrowing is higher than it had anticipated D) the debt of a particular government quickly loses value
The misperception effect explanation for an upward-sloping short-run aggregate supply curve is based on: a. falling profit margins as the price level rises
b. rising costs of production as the price level rises. c. fixed wage labor contracts. d. people mistaking changes in aggregate demand for changes in the demand for their goods relative to other goods and services.