In a perfectly competitive market, many firms produce many different varieties of the same product.
Answer the following statement true (T) or false (F)
False
In a perfectly competitive market, all firms produce the same product.
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Pick the decision maker from the list below
A) The head of Al Qaeda B) The Taliban C) The Government of Afghanistan D) The Middle East E) All of the above are decision makers.
Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $75,000. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean and $300,000 if it's polluted. Suppose the law guarantees the farmer access to clean water from the river. Which of the following describes an efficient outcome in this case?
A. The owner of the mill is unable to pay the farmer enough to secure his permission to pollute the river. B. The owner of the mill pays the farmer $87,500 for his permission to pollute the river. C. The owner of the mill pays the farmer $112,500 for his permission to pollute the river. D. The farmer pays the owner of the mill $87,500 to stop polluting.
An increase in the interest rate reduces the opportunity cost of holding money
a. True b. False
Which of the following statements about the CPI and the GDP deflator is TRUE?
A. The CPI measures the price level; the GDP deflator measures the production of an economy. B. The CPI refers to a base year; the GDP deflator always refers to the current year. C. The weights given to prices are not the same. D. The GDP deflator takes the price of imported goods into account; the CPI does not.