A competitive firm
A. Is a price taker.
B. Is large enough relative to the market to be taken into account by competitors.
C. Confronts a downward-sloping firm demand curve.
D. Has the market power to compete effectively.
Answer: A
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Which of the following is NOT a TRUE statement about perfectly competitive and monopolistically competitive firms?
A) Both monopolistically competitive and perfectly competitive firms have perfectly elastic demands. B) In the long run, only monopolistically competitive firms have excess capacity. C) Perfectly competitive firms produce at their efficient scale. D) There are a large number of firms in both monopolistically competitive and perfectly competitive markets.
A firm that has market power
A) can charge whatever it wants for its product. B) can charge a price above marginal cost. C) has positive economic profits. D) does not lose sales when increasing price.
The relative concept of poverty is based on how far a family falls behind the
a. average family income. b. top 20 percent of families. c. minimum in wages. d. any of the above.
Which of the following is part of the economic way of thinking?
a. Opportunity costs will always be incurred when scarce resources are used to produce a good. b. When the cost of an option increases, individuals will be less likely to choose it. c. In addition to their immediate direct effects, economic actions often generate secondary effects that are observable only after the passage of time. d. All of the above are part of the economic way of thinking.