A price setter is a firm that:
A. attempts but fails to be perfectly competitive.
B. faces perfectly inelastic demand.
C. has the ability to set price at any level it wishes.
D. has some degree of control over its price.
Answer: D
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Which of the following correctly describes "frictional unemployment"?
A) Frictional unemployment falls in recessions and rises in expansions. B) Frictional unemployment occurs mainly during recessions. C) Frictional unemployment includes only people who are job losers. D) Frictional unemployment is a normal occurrence in a growing economy. E) Frictional unemployment includes only people who are job leavers.
If two events are perfectly negatively correlated, then
A) diversification can reduce but not eliminate risk. B) diversification can eliminate risk. C) diversification has no impact on risk. D) diversification cuts risk in half.
A price discriminating monopolist will
A) charge a lower price to those consumers who have more elastic demand. B) charge a higher price to those consumers who have more inelastic demand. C) charge more to those consumers who have more substitute goods. D) charge the same price to all consumers.
Draw a two period budget line where the borrow/lending rate of interest, r, allows consumers to choose consumption in each of the two periods. C1 and C2 given their anticipated income on two periods, Y1 and Y2 . The slope is
a. r b. ?r c. 1 + r d. ?(1 + r)