The analysis of competitive firms sheds light on the decisions that lie behind the
a. demand curve.
b. supply curve.
c. way firms make pricing decisions in the not-for-profit sector of the economy.
d. way financial markets set interest rates.
b
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Consider the budget line labeled RT in the above figure. What would shift the budget line to RS?
A) a rise in the price of good X B) a fall in the price of good X C) a rise in the price of good Y D) a fall in the price of good Y
Assume, for Mexico, that the domestic price of beets without international trade is higher than the world price of beets. This suggests that, in the production of beets,
a. Mexico has a comparative advantage over other countries and Mexico will export beets. b. Mexico has a comparative advantage over other countries and Mexico will import beets. c. other countries have a comparative advantage over Mexico and Mexico will export beets. d. other countries have a comparative advantage over Mexico and Mexico will import beets.
If the market demand increases for a good sold in a perfectly competitive market, individual firms in the market:
A. will be able to charge a higher price for their product. B. will need to lower price in order to remain competitive. C. will not be able to change their price. D. will begin earning economic losses.
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease