The price a perfectly competitive firm receives for its output
A) is determined by the interaction of all sellers and all buyers in the firm's market.
B) is determined by the interaction of the firm and all of the consumers who buy from the firm.
C) will be lowered by the firm in order to sell more output.
D) will not change in response to changes in market demand and supply because the firm is a price taker.
A
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If the Fed wants to fight inflation, it will ________ the federal funds rate in order to ________
A) raise; decrease aggregate supply B) raise; increase aggregate supply C) raise; decrease aggregate demand D) lower; decrease aggregate demand E) lower; increase aggregate supply
Elasticity measures the
A) percentage change in a variable. B) slope of a curve. C) change in a variable. D) responsiveness of a variable to a change in another variable.
Sometimes unions can raise wages above what productivity increases would permit. When this happens, we can be sure that
A) the employment of union workers is increasing. B) some union workers end up losing their jobs. C) there is a redistribution of income from union workers to nonunion workers. D) featherbedding will occur.
How does adverse selection factor into explaining the reduced supply of loans when interest rates increase?
What will be an ideal response?