Draw a graph illustrating the relationship between the demand curve of the perfectly competitive firm and the perfectly competitive industry. Label all curves and axes correctly.
What will be an ideal response?
The diagram of the firm and industry should look like Figure 10-1 in the text. The firm’s demand curve should be horizontal at the industry equilibrium price.
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McDonald's and its major competitors compete based:
A) only on the price. B) only on the basis of product characteristics. C) on both the price and product characteristics. D) none of the above because the fast-food industry is perfectly competitive.
An import-export business that finds itself in a "short" foreign-currency position risks a financial loss if
A. the foreign currency depreciates (more than expected). B. the domestic currency depreciates (more than expected). C. it pays attention to exchange-rate forecasts. D. foreign demand for its product rises (more than expected).
Which of the following is most likely to lead to sustained long-run growth?
A. transfer of workers from agricultural to industrial sectors B. increase in labor productivity C. increases in the labor participation rate D. exploitation of natural resources
An increase in price could occur due to a(n)
a. Increase in demand and no change in supply b. Decrease in supply and no change in demand c. An increase in demand and decrease in supply d. All of the above