A firm that must determine the price-output combination that maximizes profit because it faces a downward-sloped demand curve
A. has a perfectly inelastic demand curve.
B. is a price-taker.
C. is a price searcher.
D. has a perfectly elastic demand curve.
Answer: C
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All of the following are examples of state regulations on banks except:
a. the Suffolk System b. the Safety Fund System c. required bond deposits with a state authority prior to chartering d. the Forstall System
A small economy produces only pizzas and jeans. If an economy is operating inside its production possibility frontier, which of the following statements is true?
A. it will be possible to produce more pizzas without decreasing the production of jeans. B. the economy will be operating at a point on its production possibilities curve. C. the economy will be operating at a point outside its production possibilities curve. D. it will not be possible to produce more jeans or pizzas.
Recessions
A. almost never occur in the American economy. B. follow a regular and predictable cycle. C. are common features of the American economy. D. have been abolished by wise macroeconomic policy.
The real-income effect is typically small because
A) the change in price of one particular item has little effect on total purchasing power. B) income has no relation to consumption. C) price changes tend to balance out over time. D) real-incomes are always rising.