A farmer has many competitors and exists in a market structure known as perfect competition. This means that price is determined outside of the individual farmer's ability to charge a price higher than the going market for a bushel of wheat, hence the farmer is
A. a price maker and can therefore charge different customers different prices.
B. never able to sell anything for any prices he charges.
C. a price taker and cannot affect the market price of wheat.
D. always able to price produce above the competition and earn a larger profit.
Answer: C
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Where Y is GDP, C is consumption, I is investment, G is government purchases, T is net taxes, and there is no international trade, the government budget deficit equals:
A. Y + T - G. B. T - G. C. Y - G. D. G - T.
All large firms have monopoly power
a. True b. False Indicate whether the statement is true or false
Assume that when a lamp manufacturer decreases its price its total revenue does not change. What do we know?
A. Demand is price inelastic. B. Demand is price elastic. C. Demand is unit elastic. D. Demand is perfectly price elastic.
Economic efficiency is the primary guide in answering which of the fundamental questions in a market economy?
A. What will be produced? B. How is the output to be produced? C. How can the system accommodate change? D. Who is to receive the output?