Which of the following is a characteristic of a firm in a perfectly competitive market?
A) The firm cannot make a profit in the short run because it is too small a part of the total market.
B) The firm can make a profit in the long run but not in the short run.
C) The firm can sell as much as it wants without having to lower its price.
D) The firm must lower its price in order to increase quantity demanded.
Answer: C
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The nominal wage represents: a. the wage measured in terms of the quantity of goods and services a worker can purchase with it
b. the wage measured in terms of the dollar value of the goods and services a worker can purchase with it. c. the real wage from which personal taxes has been deducted. d. the standard of living of workers across time. e. the change in real wage brought about by changes in aggregate supply.
If the actual inflation rate is equal to the expected rate, which of the following will happen?
a. inflationary expectations will increase and the Phillips curve will shift downward in the short run. b. inflationary expectations will not change and the Phillips curve will remain in its current position in the short run. c. inflationary expectations will decrease and the Phillips curve will shift downward in the short run. d. inflationary expectations will stay constant and the Phillips curve will shift downward in the short run. e. inflationary expectations will not change and the Phillips curve will become horizontal in the short run.
If in a given market of more than one producer, there were to exist for a long interval of time a positive gap between price and average cost (P > AC), this would suggest that
a. there are many sellers in the industry. b. there exists an oligopoly or cartel in the industry. c. this is a contestable market. d. the firm cannot be a monopolistic competitor.
Which of the following regarding a monopolist is INCORRECT?
A. The monopolist constitutes the entire industry. B. There are barriers to entry that allow monopoly. C. The monopolist produces only goods of highest quality. D. The monopolist is a single supplier of a good or service.