If a firm operating in a perfectly competitive industry is confronted with an equilibrium market price of $5, its marginal revenue
A. will be greater than $5.
B. will also be $5.
C. will be less than $5.
D. may be either greater or less than $5.
Answer: B
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The short-run aggregate supply curve is vertical when inflation is predicted accurately.
Answer the following statement true (T) or false (F)
China, the last large communist society,
A. has proved that a command economy has far less pollution problems than capitalist economies. B. has urban smog levels higher than Los Angeles. C. has the world’s most sophisticated pollution-control devices. D. has lowered its level of pollution dramatically since 1980.
The tolerance of bribe-taking by government officials
A) reduces economic uncertainty because all investors are aware of the practice. B) reduces economic efficiency because rules governing property rights are not regularly enforced. C) reduces government expenditures because public employees can be paid less. D) reduces the need for government to impose taxes on poor people.
In an oligopoly, following a rival’s decrease in price tends to eliminate the
a. income effect. b. substitution effect. c. multiplier effect. d. random effect.