Firms in a perfectly competitive market:
A. sell a differentiated product.
B. sell homogeneous products.
C. usually have large advertising budgets.
D. try to attract customers away from their competitors.
Answer: B
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Companies most likely use the foreign-exchange market to ________.
A) establish fair currency trading policies C) establish a global market presence D) diversify their hedge funds
Borrowing generally slows an economy down because borrowers must pay interest as well as returning the principal of the loan.
Answer the following statement true (T) or false (F)
A technological improvement can cause the production possibilities curve to shift outward because
A. maximum feasible outputs of both goods increase. B. it increases costs and contributes to lower production rates. C. it causes increases in unemployment. D. production will fall, but jobs will be saved.
When demand is elastic
A) quantity demanded is very responsive to a change in price. B) quantity demanded is not very responsive to a change in price. C) the proportional change in quantity demanded is equal to the proportional change in price. D) producers react quickly to price changes.