If the supply of product X is perfectly elastic, an increase in the demand for it will increase:
A. equilibrium quantity but reduce equilibrium price.
B. equilibrium quantity, but equilibrium price will be unchanged.
C. equilibrium price but reduce equilibrium quantity.
D. equilibrium price, but equilibrium quantity will be unchanged.
Answer: B
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Institutions that accept deposits from individuals and organizations, against which depositors can write checks on demand for their market transactions and that use these deposits to make loans are called:
A) depository institutions. B) financial market institutions. C) insurance companies. D) none of the above.
A turning point is
A) a change in policy. B) a peak or a trough. C) a boom or a recession. D) a zero deviation from trend.
Assume that labor and capital are complements in production and that the wage declines. Which of the following statements best describes the adjustment in the use of labor?
A) Adjustments in labor use are not influenced by adjustments in capital use. B) The MRPL curve shifts downward in this case. C) More labor is used both because of the reduced wage and increased use of capital. D) Changes in labor use are indeterminate because the reduced wage and reduced use of capital have opposite influences on the use of labor.
Your local 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.