The real interest rate measures the change in dollar amounts
a. True
b. False
Indicate whether the statement is true or false
False
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Both monopolistically competitive firms and perfectly competitive firms maximize profits
A) by producing where price equals average total cost. B) by producing where price equals average variable cost. C) by producing where marginal revenue equals marginal cost. D) by producing where marginal revenue equals average revenue.
Suppose one is offered a gamble in which you win $1,000 half the time but lose $1,000 half the time. Since in this case one is as likely to win as to lose the $1,000, the average payoff on this gamble—its expected value—is:
0.5 ? $1,000 + 0.5 ? (-$1,000 ) = 0. Under such circumstances: A) no one will take the gamble. B) risk averse individuals will take the gamble. C) risk lovers individuals will not take the gamble. D) risk neutral individuals will not take the gamble. E) risk lovers and risk neutral individuals may take the gamble.
The following expressions describe a perfectly competitive labor market. The labor supply curve is:
SL = AE = $3.00 + $0.000375L. The marginal revenue product of labor curve is: MRPL = $13.00 - 0.000433L. a. Find the equilibrium wage in this labor market. Also, find the optimal number of labor hours worked per week. Let L represent the number of labor hours worked per week, and let W represent the hourly wage of workers. b. Determine the economic rent earned by labor in this situation.
To practice third-degree price discrimination, each of these market conditions must be met except which one?
A) The firm must have market power. B) No arbitrage opportunities can exist between customer groups. C) Different groups of customers with equal own price elasticities of demand must exist. D) Different groups of customers with different own price elasticities of demand must exist.