What is meant by the term "free market"?
What will be an ideal response?
A free market is a market with few government restrictions on how a good or service can be produced or sold or on how factors of production can be employed.
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Give examples of factors that decrease aggregate demand. Which way does the aggregate demand curve shift?
What will be an ideal response?
Jim is haggling with a car dealer over the sale price of a used car. When he entered the store he was the only customer. This means that
a. Jim has a better chance of having his offer accepted, since the seller does not have any outside offers b. Jim has lower chances of having his offer accepted, since the seller has more outside offers c. The disagreement value for the seller has increased d. Only A&C
If an economy has a trade policy of a fixed exchange rate, then its monetary and fiscal policies are:
A. more restricted when dealing with domestic goals. B. less restricted when dealing with domestic goals. C. independent of the trade policy. D. independent of the trade regime.
Which of the following is TRUE of a perfectly competitive firm and a monopoly in the long run?
A. P = ATC B. P = MC C. P = MR D. MR = MC