When a firm sets its price on the basis of the price being charged by other firms in the market, there is evidence that the firm has market power.
Answer the following statement true (T) or false (F)
False
A perfectly competitive firm is compelled to take the market price that is determined by the interaction of supply and demand and therefore has no market power.
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Economic profit equals total revenue minus total
A) explicit costs. B) opportunity costs. C) implicit costs. D) accounting costs. E) entrepreneur's costs.
Which of the following statements is false?
A) Keynes believed that monopolistic elements in the economy will prevent immediate price declines. B) Keynes believed that during periods of high unemployment, labor unions will prevent wages from falling fast enough to restore full employment. C) Keynes believed that interest rate flexibility will ensure that saving is equal to investment. D) Keynes did not believe in Say's law.
For purposes of monetary policy, the Federal Reserve has targeted the interest rate known as the
A) federal funds rate. B) Treasury bill rate. C) discount rate. D) prime rate.
Due to extremely large fixed costs, an electricity generating plant probably experiences which of the following returns to size?
A) diseconomies of scale B) diminishing marginal product C) constant returns to scale D) economies of scale