When an individual firm in a competitive market decreases its production, it is likely that the market price will rise
a. True
b. False
Indicate whether the statement is true or false
False
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For inflation to have no real effect on the economy, leaving all decisions and their real outcomes unchanged, five conditions must be met. Which of the following incorrectly states one of those conditions?
A) Inflation is universally and accurately anticipated. B) All savings and money earn the nominal interest rate. C) Inflation of p0 percent lowers the nominal interest rate by p0 below the no-inflation nominal rate. D) Only real interest income is taxable and only the real cost of borrowing is tax-deductible. E) Inflation raises the prices of all goods by the same percentage.
Suppose the market basket consists of 100X, 200Y, and 300Z. Current-year prices are $5 for each unit of X, $2 for each unit of Y, and $3 for each unit of Z. Base-year prices are $2 for each unit of X, Y, and Z. What is the approximate CPI in the current year?
A) 15 B) 70.20 C) 1,200 D) 150
Which of the following is a macroeconomic question?
A. Should we have a constitutional amendment requiring the government to implement a national consumption tax to replace the current income tax? B. Why did a leading computer manufacturer establish call centers in India? C. Why does a pharmaceutical manufacturer try to lower its production costs? D. Should the government put a tax on alcohol in an attempt to assist in the funding of support groups like Alcoholics Anonymous?
A good that has social costs that are equal to private costs has a price that is
A) too high. B) too low. C) just right. D) equal to marginal cost.