One problem with deflation is that it can raise the real value of debt
Indicate whether the statement is true or false
TRUE
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Cost functions must be homogeneous of degree 1 in (input and output) prices.
Answer the following statement true (T) or false (F)
Which of the following statements is true of perfect competition?
A) The outcome in a perfectly competitive market is Pareto inefficient. B) The total value of production across a perfectly competitive industry is maximized. C) Firms under perfect competition produce at a point where price is greater than marginal cost. D) Consumers in a competitive market purchase at a point where marginal utility is greater than price.
Consider the following statements when answering this question. I. As Boeing's production fell 10% to 100 planes last year, learning by doing cannot account for this year's changes in long-run average costs. II
Failure to take into account the effects of learning by doing will lead to overestimates of the cost-output elasticity. A) I is true, and II is false. B) I is false, and II is true. C) Both I and II are true. D) Both I and II are false.
Which of the following is associated with high price elasticity of demand?
a. Luxury goods b. A very short time period for consumers to respond to price changes c. Many close substitutes d. Low share in consumer's budget