Perfect competition is a situation in which
A. Every year, owners are likely to earn economic profits.
B. There are many firms and several buyers or sellers have market power.
C. There are many firms and no buyer or seller has market power.
D. Every year, owners are likely to earn economic losses.
Answer: C
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How did the global savings glut in the 2000s affect the U.S. current account balance?
A) It caused it to decline by increasing the value of the dollar. B) It caused it to decline by reducing the value of the dollar. C) It caused it to increase by increasing the value of the dollar. D) It caused it to increase by reducing the value of the dollar.
Which method of corporate finance is used the most? Why?
What will be an ideal response?
Suppose a firm in a perfectly competitive market is operating at its profit-maximizing level of output. Will the firm suspend operations if it faces a reduction in the price it can charge for its product?
a. No, because it can always raise its prices in the short run. b. No, because it can always raise its prices in the long run. c. No, as long as the firm earns sufficient revenue to pay all of the variable costs. d. Yes, since it never makes sense to operate at a loss, even in the short run. e. No, because it always makes sense to operate at a loss, even in the long run.
If the price elasticity of supply is 0.5 and the quantity supplied decreases by 6%, then the price must have decreased by 3%
a. True b. False Indicate whether the statement is true or false