The perfectly competitive firm faces
A) a downward sloping demand curve.
B) a horizontal supply function.
C) perfectly elastic demand.
D) constant marginal costs.
Answer: C
You might also like to view...
In a survey of consumers, Daniel Kahneman, Jack Knetsch and Richard Thaler asked their opinion of a hardware store's decision to
A) remain in business even though the store was not making an economic profit; 82 percent of those surveyed believed it would be unfair for the store to go out of business if there were no other hardware stores in the same area. B) go out of business because a larger hardware store opened in the same city; 82 percent of those surveyed believed it was unfair for the larger store to compete with the smaller store. C) sell tickets to sporting and cultural events at prices higher than prices paid at the ticket windows for the same events; 82 percent of those surveyed believed this was unfair. D) raise the price of snow shovels the day following a snowstorm; 82 percent of those surveyed believed this was unfair.
In recent years the labor force participation rate has been fairly stable
A) as has the labor force participation rate for males, females, minorities, and nonminorities. B) although the female labor force participation rate has fallen while the male labor force participation rate has increased. C) although the male labor force participation rate has fallen while the female labor force participation rate has increased. D) although the labor force participation rate of young adults has increased while the labor force participation rate of those in the 40-55 age classification has fallen.
Pseudo out of sample forecasting can be used for the following reasons with the exception of
A) giving the forecaster a sense of how well the model forecasts at the end of the sample. B) estimating the RMSFE. C) analyzing whether or not a time series contains a unit root. D) evaluating the relative forecasting performance of two or more forecasting models.
Suppose a company increases production from a point where marginal cost equals average total cost to a point where marginal revenue and marginal cost are equal. Is it a good idea for the company to do this? Why?
A. No, average total costs have increased which means the company is not minimizing losses. B. Yes, because average variable costs are always less than average total costs. C. No, the previous level of output was the most efficient because it had the lowest average total cost. D. Yes, even though the previous level of output had minimized the average total cost, there was still profit to be earned by producing additional units.