Which of the following statements is true of a perfectly competitive market?
A) Innovation is less likely in a competitive market because of free entry and exit of firms.
B) Innovation is likely in a competitive market because of free entry and exit of firms.
C) The firms in a competitive market invest more in R&D because they face an inelastic demand curve.
D) The firms in a competitive market invest more in R&D because their demand for resources is perfectly elastic.
A
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According to the BEA, in the second quarter of 2012 personal consumption expenditures grew by 1.7 percent, gross private domestic investment grew by 3.0 percent,
government expenditure on goods and services decreased by -0.9 percent, imports grew by 2.9%, and exports grew by 6.0%. Given these data, it is most likely that A) GDP growth was positive in the 2nd quarter. B) GDP growth was negative in the 2nd quarter. C) the economy hit a business cycle peak. D) the economy hit a business cycle trough.
For a linear demand curve, where is the amount of total expenditures on a good maximized?
What will be an ideal response?
The figure below shows the U.S. market for imported wine. For simplicity, we consider export supply curves to be flat. Chilean wine is available for $480 per barrel and French wine is available for $420 per barrel.
Under free trade, how many barrels of wine will the United States import and who will they import from?
A. 15 million barrels from Chile B. 22 million barrels from Chile C. 22 million barrels from France D. 10 million barrels from France
The International Monetary Fund (IMF) is an international organization designed to
A. circulate a single currency worldwide. B. promote world economic growth via loans to developed nations. C. act as the world's central bank. D. promote world economic growth by means of greater financial stability.