Jonathan Gold Miners & Co operates in a perfectly competitive market. In recent years, it has benefitted from a record rise in gold prices as the price of its output is highly influenced by market speculation. It buys its inputs from perfectly competitive resource markets. If it wants to take advantage of the rise in gold prices, it should:
a. increase its production and accept the market price
for its physical capital inputs.
b. increase its price to a level where it is higher than its marginal revenue.
c. reduce its production to encourage speculators to drive gold prices higher.
d. negotiate to reduce the wage rate of its labor inputs to maximize profits.
a
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Indicate whether the statement is true or false
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A) free capital mobility and independent monetary policy B) free capital mobility and fixed exchange rate C) fixed exchange rate and independent monetary policy D) fixed exchange rate and capital controls
The difference between what can be produced and consumed without specialization and trade and with specialization and trade is called:
a. comparative advantage. b. a tradeoff. c. marginal cost. d. opportunity cost. e. gains from trade.
A subsidy is sometimes used by government to correct the problems associated with
A. negative externalities. B. internal benefits. C. positive externalities. D. external costs.