General Equilibrium Assumptions:
What will be an ideal response?
Answer: All individuals and firms take prices as given.... they are price takers, All individuals maximize utility, All firms maximize profit, All individuals and firms are fully informed, there are no transaction costs, and there is no uncertainty
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Johnny has been working a lot of overtime during the most current economic boom. As a result, his income is high enough for him to move from the 10 percent tax bracket to the 15 percent tax bracket. So, Johnny pays a higher percentage of a higher income to the government this year. The increased amount paid to the government is an example of:
A. discretionary fiscal policy slowing the economy. B. discretionary fiscal policy encouraging economic activity. C. automatic stabilizers slowing the economy. D. automatic stabilizers encouraging economic activity.
Market failure can occur when
A. monopoly power exists in the market. B. markets are missing. C. consumers can influence prices. D. all of these answer options are correct.
Phillips's research looked at British data on
A. inflation and nominal wage growth. B. unemployment and nominal wage growth. C. unemployment and output. D. unemployment and inflation.
BP and Exxon both produce petroleum products and sell them at the wholesale and retail levels. One of them is also in the coal business. The merger of the two firms is an example of
a. horizontal integration. b. vertical integration. c. both horizontal and vertical integration. d. a tournament.