A perfectly competitive market is one where:
A. each firm controls the price charged for its product by changing the quantity they produce.
B. each firm sells at the government mandated price.
C. each firm within the market must sell its good at the market price.
D. a firm can affect market price by increasing output.
Answer: C
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Exhibit 30-3 Costs of Eliminating:Firm A Firm B Firm C 1st ton of pollution$ 30 $ 50 $ 600 2nd ton of pollution$ 70 $ 90 $ 700 3rd ton of pollution$125 $150 $ 900 4th ton of pollution$200 $250 $1,300 Refer to Exhibit 30-3. Suppose that Firms A, B, and C are the only polluters in the state and that each emits 4 tons of pollution into the atmosphere. To cut the level of pollution in half the government issues two transferable pollution permits to each firm. What is the total cost to society of decreasing pollution to half its present level if firm C buys one pollution permit from firm A and one pollution permit from firm B?
A. $515 B. $1,300 C. $1,380 D. $965 E. $10,350
People prefer to hold less of their wealth in the form of financial assets like bonds and term deposits when: a. real GDP is at an all-time low
b. the real interest rate is above 10 percent. c. the price level is very low. d. the nominal interest rate is close to zero. e. the nominal interest rate is very high.
If the Fed reduces the discount rate, which of the following are most likely to result?
a. The money supply curve shifts rightward, and the equilibrium interest rate falls in the money market. b. Investment declines, causing the aggregate demand curve to shift leftward, reducing equilibrium real GDP and thus slowing the economy. c. Investment rises, causing the aggregate demand curve to shift rightward, increasing equilibrium real GDP and thus accelerating the economy. d. Both a. and b. above are correct. e. Both a. and c. above are correct.
When an economy operates efficiently,
A. the MRPs of every input into the production of a good are equal. B. marginal utility equals marginal cost for every good. C. the price of a good equals the sum of the marginal physical products of its inputs. D. All of the responses are correct.