For a competitive equilibrium to occur, all of the following has to happen except
A) agents are price takers.
B) the government sets taxes at zero.
C) markets clear.
D) the actions of all agents are consistent.
B
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In the long run, the firms in a perfectly competitive market
A) maximize their profit. B) make an economic profit. C) display price setting behavior. D) are protected by barriers to entry.
Which of the following is an example of a public good?
A) a box of bath tissues B) a public bus C) an ice cream cone D) street signs
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's economic profits?
A. $78,000 B. $142,000 C. $138,000 D. $150,000
Which of the following is a reason that marginal product will eventually begin to fall?
a. effective use of fixed inputs b. decrease in demand c. increased specialization d. limited amounts of fixed inputs