A firm in a perfectly competitive market:
A. must take the price that is determined in the market.
B. must reduce its price if it wants to sell a larger quantity.
C. must be large relative to the total market.
D. can exert a major influence on the market price.
Answer: A
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You produce stereo components for sale in two markets, foreign and domestic, and the two groups of consumers cannot trade with one another. You will charge the higher price in the market with the
A) lower own price elasticity of demand (more inelastic demand). B) higher own price elasticity of demand (more elastic demand). C) larger teenage population. D) greater consumer incomes.
The American Recovery and Reinvestment Act, signed by President Barack Obama in 2009, aimed at: a. stimulating the aggregate demand in the economy
b. removing the supply bottlenecks in the economy. c. closing an expansionary gap through a contractionary fiscal policy. d. ensuring free trade flows across the world. e. providing higher unemployment benefits to the residents of the economy.
According to UIP, when interest rates are equal, the exchange rate of the country's home currency is expected to:
a. fall. b. remain constant. c. rise. d. Not enough information is provided to answer the question.
Well-run financial markets:
A. are usually the result of little or no government regulation B. ensure that resources are allocated efficiently C. keep transactions costs high to benefit brokers D. prevent the widespread pooling of information