If a single firm in a price-taker market lowers its price below the market equilibrium price,
a. it will get a larger share of the market.
b. it will lose revenue without increasing the quantity it can sell.
c. other firms will lower their prices.
d. other firms will be driven out of the industry.
B
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Figure 5-6
A shift in the budget line in Figure 5-6 from AB to AC indicates
A. the price of wine coolers has risen. B. income has increased. C. the price of beer has fallen. D. the price of wine coolers has fallen. E. All of the responses are correct.
Oligopoly: a. Meets the condition for allocative efficiency. b. Meets the condition for productive efficiency. c. Leads to slower technological progress
d. None of the above is true.
In order to calculate the real interest rate, simply:
A. add the rate of inflation to the nominal interest rate. B. subtract the rate of inflation from the nominal interest rate. C. subtract the nominal interest rate from the rate of inflation. D. divide the nominal interest earned by the rate of inflation.
Joe Spengler, now age 54, lost his job as a shipbuilder during the recession of 1991 . His plant never reopened, and he has very specialized skills that are no longer in demand. Joe's unemployment is best classified as
a. cyclical b. structural c. discouraged d. frictional e. voluntary