Firms that are price takers
A) must lower their prices to increase sales.
B) are able to sell a fixed quantity of output at the market price.
C) can raise their prices as a result of a successful advertising campaign.
D) are able to sell all their output at the market price.
Answer: D
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Ron regularly deposits $200 each week into a savings account, which earns 3% interest per year. This month he decides instead to invest $200 into the stock market. What is the opportunity cost of Ron's decision to invest rather than save?
A) $200 B) The 3% interest he could have earned by depositing another $200 into his savings account C) The difference between the rate of return he enjoys in the stock market and the 3% interest return he could have earned by depositing that $200 into his savings account D) Zero, because Ron already had the $200
In perfect competition, the market demand for the good ________ perfectly elastic and the demand for the output of one firm ________ perfectly elastic
A) is; is B) is; is not C) is not; is D) is not; is not
Some people support the Euro in hopes that the European Central Bank will emulate the monetary policy of the central bank of
A) Germany. B) France. C) Italy. D) Spain.
Income effect of lowering wages implies
A. workers prefer leisure to work. B. an increase in the productivity of labor. C. a fall in the demand for labor. D. workers would want to work more.