Firms that operate in perfectly competitive markets try to
a. maximize revenues.
b. maximize profits.
c. equate marginal revenue with average total cost.
d. All of the above are correct.
b
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The XYZ Co is hiring salespersons. They will be paid a very attractive hourly rate that is independent of how much they sell. Describe an adverse selection that would take place. Describe a moral hazard that would take place
What will be an ideal response?
Assume that a particular state has decided to outlaw the sharing of individuals' credit histories as an illegal invasion of privacy. As a result of this action we would expect the
A) cost of borrowing money to rise. B) number of loans to unworthy credit risks to rise. C) problems of asymmetric information to become more severe. D) all of the above E) none of the above
A large oligopolistic firm that unilaterally makes changes in price which competitors tend to follow is known as a: a. price leader
b. price maker. c. dominant strategy firm. d. cartel leader.
Which of the following is an example of investment in computing Gross Domestic Product (GDP)?
A. the purchase of company stock by a retiree B. a laptop purchased by a student C. an increase of inventory stock in a retail store D. a deposit of $10,000 in a bank