When demand increases, in the short run the purely competitive firm:
A. can alter available inputs and output as well as the size of the plant.
B. will earn higher profits or experience smaller losses.
C. will experience no change in costs as it steps up production.
D. will spend more on advertising.
Answer: B
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Which of the following best describes the reason why the division of labor allows individuals and firms to specialize and produce more?
a. It reduces the need for more workers. b. It limits the need for economies of scale. c. It allows individuals and firms to focus on areas of disadvantage due to natural factors and skill levels. d. It allows individuals and firms to take advantage of economies of scale.
The Fed has a monopoly on printing paper currency in the United States
Indicate whether the statement is true or false
The principal-agent problem refers to the fact that the agent's goals:
A. coincide with those of the principal. B. do not overlap with those of the principal. C. do not always coincide with those of the principal. D. overlap with those of the principal.
When the expected rate of inflation is added to the real interest rate, the result is called the:
A. preferred rate. B. nominal interest rate. C. adjustment rate. D. differential rate.