Which assumption(s) is (are) necessary for an efficient allocation of resources among firms?
A. Firms behave so as to maximize their profits.
B. Factor markets are open and competitive.
C. All firms pay the same prices for inputs.
D. All of the above are correct.
Answer: D
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A concentration ratio is the ratio of
a. market share to the number of firms in an industry b. total sales to the number of firms in an industry c. large firms to small firms in an industry d. total sales of the leading firms to total sales in the industry e. total profits of the leading firms to total profits in the industry
Inflation can be caused either by rapid growth rate of aggregate demand or by sluggish growth of aggregate supply.
Answer the following statement true (T) or false (F)
The market for wheat can be described at perfectly competitive while the market for pizza is better described as monopolistically competitive
Which of the following is a NOT a similarity between perfectly competitive and monopolistically competitive firms? A) Both monopolistically competitive and perfectly competitive firms produce at their efficient scale. B) Both monopolistically competitive and perfectly competitive firms are free to enter and exit the market. C) Both monopolistically competitive and perfectly competitive firms have a small market share. D) There are a large number of firms in both monopolistically competitive and perfectly competitive markets.
From the Monetarist perspective, an autonomous downward shift in investment will
A) shift the aggregate demand curve to the left. B) shift the aggregate demand curve to the right. C) have little effect on the aggregate demand curve. D) cause a downward shift in the consumption function.