A farmer has many competitors and exists in a market structure known as perfect competition. This means that price is determined outside of the individual farmer's ability to charge a price higher than the going market for a bushel of wheat, hence the
farmer is
A) a price maker and can therefore charge different customers different prices.
B) always able to price produce above the competition and earn a larger profit.
C) never able to determine any prices he charges for anything, such as soybeans.
D) a price taker and cannot affect the market price of wheat.
Answer: D
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Which of the following would increase household saving and thus equilibrium investment spending?
a. A reduction in the investment tax credit. b. An increase in the corporate profits tax. c. A decrease in the capital gains tax. d. An increase in the investment tax credit. e. An increase in government regulation.
In producing the efficient amount of a public good, government should take into account:
A. only the demand from high-demand consumers. B. only the demand from low-demand consumers. C. the horizontal sum of all individual inverse demand curves. D. the vertical sum of all individual inverse demand curves.
In reference to industrial policy, networks of interdependent firms, universities, and businesses that focus on production of a specific type of good are called:
A. vertical industries. B. integrated industries. C. bundles. D. clusters.
In the above figure, over the price range P5P6, demand is
A. unit elastic. B. inelastic. C. perfectly inelastic. D. elastic.