Competitive firms cannot individually affect market price because
A. There is an infinite demand for their goods.
B. Their individual production is insignificant relative to the production of the industry.
C. The government exercises control over the market power of competitive firms.
D. Demand is perfectly inelastic for their goods.
Answer: B
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In the prisoner's dilemma setting for stealing and producing, both participants end up __________, which turns out to be ________________________ stolen. The government _________ make both participants better off by changing the payoff matrix.
A. stealing; better for them than if they had both not; can B. stealing; worse for them than if they had both not; can C. not stealing; better for them than if they had both; cannot D. not stealing; worse for them than if they had both; cannot
If there is a positive demand shock, which of the following would represent the most likely short and long-run outcomes? (Assume the economy was initially at full employment)
a. In the short run, real GDP and the price level would increase; in the long run, real GDP would return to its original level while the price level would rise even further. b. In the short run, real GDP and the price level would increase; in the long run, real GDP and the price level would return to their original level. c. In the short run, real GDP would increase and the price level would decrease; in the long run, real GDP would return to its original level while the price level would rise even further. d. In the short run, real GDP and the price level would decrease; in the long run, real GDP would return to its original level while the price level would rise even further. e. In the short run, real GDP and the price level would increase; in the long run, real GDP would increase while the price level would return to its original level.
___________ include all spending on labor, machinery, tools, and supplies purchased from other firms
a) Total revenue b) Total profits c) Average profit margin d) Total cost
What would be the likely result of a recessionary gap? If this leads to a fall in the nominal wage what impact it would have on the aggregate supply curve and on recessionary gap?
What will be an ideal response?