What does it mean for a good to have a demand-determined price?
What will be an ideal response?
A demand determined price occurs when a good is fixed in supply. In this case, the price is determined exclusively by the amount that firms and households are willing to pay for the good.
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Which of these is a central argument of Keynes's General Theory? a. Competition does not allocate resources efficiently in a modern industrial economy
b. Full employment can be maintained even during a major recession if wage rates are lowered far enough. c. Modern industrial economies do not tend automatically toward full employment rates of output. d. Money does not play an important role in either causing or curing recession. e. Government can best stabilize the economy by letting the market system automatically adjust toward full employment.
Which of the following most closely approximates the conditions of a competitive price-searcher market?
a. the market for Grade A eggs, which is characterized by a large number of firms producing a homogeneous product b. the restaurant industry, which is characterized by firms producing a differentiated product in a market with low entry barriers c. local cable television service, where a licensed supplier competes with firms offering satellite service d. the market for jumbo aircraft, where one major domestic firm competes with one major foreign firm
Other things the same, an increase in the price level induces less spending on a. investment and net exports
b. investment, but not net exports. c. net exports, but not investment. d. neither net exports nor investment.
Assuming a firm is selling its output in a purely competitive market, its resource demand curve can be determined by
A. multiplying total product by product price. B. dividing total revenue by marginal product. C. comparing marginal product with various possible input prices. D. multiplying marginal product by product price.