Which of the following is a characteristic of a firm in a perfectly competitive market?
A) The firm must lower its price in order to increase quantity demanded.
B) The firm cannot make a profit in the short run because it is too small a part of the total market.
C) The firm can make a profit in the long run but not in the short run.
D) The firm can sell as much as it wants without having to lower its price.
D
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Refer to Figure 26-12. In the dynamic AD-AS model, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B
A) the unemployment rate is greater than the natural rate of unemployment. B) incomes and profits are falling. C) there is pressure on wages and prices to fall. D) firms are producing above capacity.
Fred, a poor college student, states: "I eat tuna sandwiches five times a week. When I graduate and get a real job, I will never purchase tuna again." Is Fred planning on breaking the law of demand?
A new tax introduced by the government will _____
Fill in the blank(s) with the appropriate word(s).
If the demand for a product is perfectly elastic and supply is upsloping, a $1 excise tax per unit on suppliers will:
A. not raise price at all. B. lower price by $1. C. raise price by more than $1. D. raise price by $1.