"A perfectly competitive firm is called a price maker because all the firms together must make the market price." Is the previous statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
The statement is false. A perfectly competitive firm is called a "price taker" because the firm must take whatever price the market determines. Any single firm's actions cannot affect the market price.
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If you spend a large portion of your income on a good,
A) supply of that good would be price elastic. B) demand for that good is more elastic than if you spent a smaller portion of your income on the good. C) supply of that good is price inelastic. D) demand for that good is less elastic than if you spent a smaller portion of your income on the good. E) the good must be able to be produced at a constant (or gently rising) opportunity cost.
Which of the following is likely to affect the position and shape of society's production possibilities frontier?
a. volume of physical resources b. level of labor skills c. level of technology d. amount of factories on hand e. All of the above are correct.
A binding price ceiling causes a shortage in the market
a. True b. False Indicate whether the statement is true or false
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars
A. remains constant. B. decreases. C. initially increases, then decreases. D. increases.