In a perfectly competitive market,
A. a firm can sell as much as it wants at the existing market price.
B. the additional revenue from selling one more unit of output is less than the market price.
C. a firm can attract more customers by lowering its price.
D. both a and c
E. both b and c
Answer: A
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When the Fed decreases the money supply: a. aggregate demand and aggregate supply both increase
b. aggregate demand increases, which leads to movement along the short-run aggregate supply curve. c. aggregate demand decreases, which leads to movement along the short-run aggregate supply curve. d. aggregate supply increases, which leads to movement along the aggregate demand curve. e. aggregate supply decreases, which leads to movement along the aggregate demand curve.
According to the simple quantity theory of money in the AD-AS framework, when the money supply decreases, the result is __________ in Real GDP and __________ in the price level
A) no change; no change B) a rise; no change C) no change; a rise D) a rise; a fall E) no change; a fall
The firm's most efficient output
A. is OR.
B. is OS.
C. is OT.
D. None of the choices are correct.
When income rises
A. quantity of a normal good demanded rises. B. demand for a normal good rises. C. demand for a luxury good falls. D. demand for an inferior good rises.