Which of the following is characteristic of a firm that is a competitive price searcher?
a. The firm faces an upward-sloping demand curve.
b. The firm faces an inelastic demand curve.
c. The firm faces a horizontal demand curve.
d. The firm produces a differentiated product.
D
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Which of the following statements is true about a simple circular flow model?
A) Producers are buyers in the factors market. B) Producers are neither buyers nor sellers in the product market. C) Households are neither buyers nor sellers in the input market. D) Households are sellers in the product market.
Economies of scale will lead to only one firm in the industry because
A) by increasing output a firm is able to lower the cost per unit and charge lower prices driving smaller firms out of business. B) one firm has an average cost curve, which has shifted below the average cost curves of its competitors. C) there are governmental entry restrictions. D) of government licensing.
An increase in price causes an increase in total revenue when demand is
a. elastic. b. inelastic. c. unit elastic. d. All of the above are possible.
Changes in the interest rate bring the money market into equilibrium according to
a. both liquidity preference theory and classical theory. b. neither liquidity preference theory nor classical theory. c. liquidity preference theory, but not classical theory. d. classical theory, but not liquidity preference theory.