Which of the following statements is NOT true for a perfectly competitive firm?
A. The market demand and supply curves determine the market price.
B. The firm's demand curve is perfectly elastic.
C. The firm can influence its demand curve by advertising its product.
D. A firm's demand curve is horizontal.
Answer: C
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Many fast-food restaurants have signs on their cash registers that read, "Your meal is free if the cashier does not give you a receipt". What might be the purpose of such a sign? Hint: there is a moral hazard problem here
What will be an ideal response?
If a detrimental externality is being produced in the course of producing a good, then
A. P > MSC. B. MSC < MPC. C. incidental costs are negative. D. output is inefficiently large.
Suppose Americans buy inputs from foreigners. When the price of foreign inputs falls, the U.S. SRAS curve __________, which tends to __________the U.S. price level
A) shifts rightward; reduce B) shifts leftward; increase C) shifts leftward; reduce D) remains constant; increase
Which of the following statements about explicit costs is true?
A. They appear on the firm's balance sheet. B. They are the only costs that matter to business owners. C. They usually exceed implicit costs. D. They are difficult to measure.