If a perfectly competitive firm doubles its output,
a. price will fall, obeying the law of demand
b. it will have no effect on price
c. the market supply curve shifts to the left
d. its profit will double
e. it prevents other firms from entering the market
B
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Suppose that there is no government and no international trade. When C + I is less than the level of real GDP
A) unplanned inventories increase, and real GDP contracts. B) unplanned inventories decrease, and real GDP expands. C) real planned investment spending equals real planned saving. D) unplanned inventories equal zero, and there is no change in the level of real GDP.
Real interest rates were negative during most of the
A) 1960s. B) 1970s. C) 1980s. D) 1990s.
Because the benefits derived from an activity decline as it is expanded, it is generally wise to
a. undertake all actions that generate benefits. b. expend the smallest possible amount of resources on this type of activity. c. avoid any activity with this characteristic. d. stop the activity before perfection is reached..
Requiring a firm with international operations to follow the standards of its home country instead of those of the foreign country has all of the following advantages EXCEPT
A) it takes care of the fear of a race-to-the-bottom by making it impossible for a home-based company to exploit low standards.
B) it shifts the costs of improved standards to firms and consumers in high-income countries.
C) it removes the threat of domestic firms relocating abroad for low standards and ensures that any relocation that takes place is due to foreign comparative advantage.
D) it avoids the problems of high-income countries dictating what standards are to be used. In this situation, firms that cross national boundaries must conform to whichever standards are higher.
E) it is a comprehensive measure, since it addresses the problem of production in foreign firms as well as firms from high-standards countries that relocate abroad.