The demand curve for a firm in perfect competition is equal to its:
A. average total cost curve.
B. average fixed cost curve.
C. marginal revenue curve.
D. marginal cost curve.
Answer: C
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In response to a temporary change in total factor productivity, the adoption of capital controls under a flexible exchange rate
A) amplifies the effect of this disturbance on both domestic output and the nominal exchange rate. B) amplifies the effect of this disturbance on domestic output and dampens the effect on the nominal exchange rate. C) dampens the effect of this disturbance on domestic output and amplifies the effect on the nominal exchange rate. D) dampens the effect of this disturbance on both domestic output and the nominal exchange rate.
Technological advancement creates unemployment in firms that shut down or labor that is laid off. Wealth in this case is
a. Destroyed, since firms are shutting down and production of certain goods and services decreasing b. Created, since the dislocated labor and resources are absorbed by new firms created through the technological innovation, moving them to higher value use c. Destroyed, since technological progress is leading to higher unemployment d. None of the above
When economists refer to an economy's price level, they indicate: a. the rate of inflation in that economy
b. the prices of goods and services relative to consumers' incomes. c. a composite measure of prices of all goods and services. d. a period of level, or steady, prices in that economy. e. the price of a specific consumer good.
When the Fed wishes to decrease the money supply, it can
A. ask people to buy more bonds. B. turn additional funds over to the Treasury. C. increase the required reserve ratio. D. decrease the required reserve ratio.