There are many wheat farmers in the world, and there are also many McDonald's restaurants in the world. Why, then, does a McDonald's restaurant face a downward-sloping demand curve while a wheat farmer faces a horizontal demand curve?
What will be an ideal response?
Wheat framers are selling identical goods, but fast food restaurants do not sell identical goods. If a wheat farmer raises his price above the market price, he will lose all of his buyers. A McDonald's restaurant can raise its price without losing all of its buyers because it is selling a product that is not identical to the products sold by other restaurants.
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If you post your car on eBay with a "Buy It Now" price of $1,800, you are using money as
A. bank reserves. B. a medium of exchange. C. a unit of account. D. a store of value.
The value of marginal product (VMP) of labor is the extra revenue generated by
A) selling one additional unit of output. B) raising the price of the good by one dollar. C) hiring one additional unit of labor. D) price discrimination.
Free trade ________ living standards by ________ economic efficiency
A) lowers; eliminating B) raises; equalizing C) lowers; decreasing D) raises; increasing
The market demand curve in perfect competition is horizontal.
Answer the following statement true (T) or false (F)