In a perfectly competitive market, all of the following are true EXCEPT:
A. firms take prices as given.
B. firms produce the quantity for which marginal cost equals price.
C. firms can increase profits by charging a price higher than the market price.
D. buyers take prices as given.
C. firms can increase profits by charging a price higher than the market price.
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Using the notation Pt to designate this period's price level and Pt-1 to designate last period's price level, the formula for measuring the inflation rate from last period to this period is
A) [(Pt - Pt - 1 ) / Pt] × 100. B) [(Pt -1 - Pt) / Pt - 1] × 100. C) [(Pt - Pt - 1 ) / Pt - 1] × 100. D) [(Pt -1 - Pt) / Pt] × 100.
If 1 U.S. dollar exchanges for 3.98 Polish zlotys, how much would it cost in zloty to purchase a Ford Explorer priced at $23,000?
What will be an ideal response?
If the government removes a binding price floor from a market, then the price received by sellers will
a. decrease, and the quantity sold in the market will decrease. b. decrease, and the quantity sold in the market will increase. c. increase, and the quantity sold in the market will decrease. d. increase, and the quantity sold in the market will increase.
Velocity will be constant if the demand for money with respect to the interest rate is
A. elastic, but not perfectly elastic. B. perfectly elastic. C. perfectly inelastic. D. unitary elastic.