Assume that the production technology required to produce goods X and Y is very similar. If a firm that is producing good X notices that the market price of good Y is rising, it will:
A. shift into producing good Y.
B. anticipate a price increase for good X.
C. intensify its production of good X.
D. charge a higher price for good X.
Answer: A
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Because minimum wage is a price floor
A) it will maximize consumer surplus. B) it will create a deadweight loss. C) it will be set below the market equilibrium price. D) it will increase the number of jobs available in the labor market.
If firms and households form their expectations about inflation by looking at past inflation, this form of expectations formation is known as ________ expectations
A) adaptive B) forward-looking C) rational D) perfect
As firms gain market share, industries become more competitive
Indicate whether the statement is true or false
In economics, ________ are limited but ________ are unlimited.
A) wants; resources
B) resources; wants
C) money; ideas
D) ideas; money