Perfectly competitive firms are price takers because
a. all small firms must take the price set by the largest firm in the market
b. firms take the price that government determines is a "fair" price
c. each firm is small and goods are perfect substitutes for one another
d. free entry and exit in the short run creates a constant market price in the long run
e. high barriers to entry force firms to compete by charging lower prices than other firms in the industry
C
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Some college students have claimed that because their incomes will be higher as a result of attending college, there is no opportunity cost of attending college. Do you agree? Explain.
What will be an ideal response?
The current account in the BOP records:
a. all money flowing between countries. b. a nation's yearly exports and imports of goods and services. c. only the transactions involving capital goods in international trade. d. only the transactions involving consumer goods in international trade. e. only those goods and services purchased on credit in international transactions.
The Laffer curve depicts a basic idea of which of the following schools?
a. supply-side economics b. rational expectations c. Keynesian d. neo-Keynesian e. classical
Which of the following is a possible result of price confusion?
A. People are less able to take actions that mitigate the impact of monetary policy. B. Sellers will face pressure to provide more accurate pricing information. C. The price system becomes a less effective way to coordinate economic action. D. The signals that prices send become clearer and more necessary.