MC and MU are set equal to one another in a market economy because
A. producers and consumers are free to communicate with one another.
B. producers and consumers both respond to the same price.
C. consumers must accept the prices set by producers.
D. producers must accept the price set by consumers.
Answer: B
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A unit-elastic demand curve will be concave toward the origin .
Answer the following statement true (T) or false (F)
Expenditure switching refers to
A) a switching back and forth between investment and consumption expenditures. B) a switching back and forth between domestic and foreign goods in response to changes in the exchange rate. C) a switching back and forth between domestic and foreign goods in response to changes in the interest rate. D) a switching of back and forth in the current account from a deficit to a surplus and vice versa. E) All of the above.
Flexible exchange rates, proving to be much ________ volatile than economists predicted, have led to ________ calls for a return to fixed exchange rates
A) less, few B) less, many C) more, few D) more, many
When the market estimate of a company's riskiness increases the market adjusts by
a. having the supply of that bond increase. b. having the supply of that bond decrease. c. having the demand for that bond increase. d. having the demand for that bond decrease.