When a market is in equilibrium, both buyers and sellers do not perceive a benefit from changing their behavior. Why?
What will be an ideal response?
In most economic situations, an economic agent is not optimizing individually. His decision is influenced by the decisions taken by other economic agents. In equilibrium, each and every economic agent is doing the best that they can do, given the information they have and given the actions of other economic agents. Therefore, nobody perceives a benefit from changing his or her behavior.
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The relationship between real GDP and potential GDP is that
A) real GDP always equals potential GDP. B) real GDP never equals potential GDP. C) real GDP fluctuates about potential GDP. D) real GDP is always below potential GDP.
Why would economies of scale be a barrier to entry?
What will be an ideal response?
According to the efficient markets theory of stock prices, some investors outperform the market because
a. they are especially skilled at analyzing stock price trends b. in any large group of investors, there will probably be some unusually lucky ones c. they are most likely the beneficiaries of insider trading d. they have better information about firms' technologies and production costs e. they have a superior ability to predict consumer behavior
Price elasticity of demand relates to the
a. sensitivity of people's quantity demanded to changes in price b. sensitivity of price to changes in people's quantity demanded c. percentage shifts in demand when price changes d. percentage shifts in demand for every one-percent change in price e. ratio of actual to expected price changes