Each firm's capital stock is fixed in the short run. Therefore, if the price of capital increases, then in the short run the market demand curve for labor in a perfectly competitive market will
a. shift inward.
b. be unaffected.
c. shift outward.
d. change slope.
b
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Firms that face capacity constraints can increase output only up to the capacity, but no further. Therefore, firms
a. Should price to capacity as long as MR > MC b. Should price to capacity as long as MR = MC c. Should price to capacity as long as MR < MC d. Should not take capacity into consideration in pricing decisions
Whenever exports exceed imports (and other planned injections equal other planned leakages), the economy
a. remains stable. b. expands. c. contracts. d. deflates.
When Johanna cut prices in her jewelry store by 20 percent, the dollar value of her sales fell by 20 percent. This indicates that
a. demand was elastic. b. demand was inelastic. c. demand was unit elastic. d. the demand curve was vertical.
Corporations obtain funds when their previously issued stock is traded
a. True b. False Indicate whether the statement is true or false