Under perfect competition, the firm must decide
A) the best price to charge for its product.
B) the best rate of output it should produce.
C) the optimal level of advertising to engage in.
D) the optimal level of quality and the packaging that will maximize profits.
Answer: B
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Economies where some production decisions are made by the government and some are made by buyers and sellers are called
A) command economies. B) market economies. C) mixed economies. D) capitalist economies.
Studies have shown that children born into poverty do not suffer from lasting health problems
Indicate whether the statement is true or false
Hospitals announce that there are not enough nurses available to keep them fully staffed. Economically speaking, what does this announcement mean?
A) The market wage for trained nurses is currently above the equilibrium wage. B) There is currently a surplus of nurses in this market. C) The market wage for nurses will eventually rise to the market clearing wage. D) The market will adjust very rapidly to correct this imbalance because anyone can be a nurse without any training.
Other things being equal, a higher price induces
A) buyers to reduce the amount they want to buy and sellers to increase the amount they are willing to sell. B) buyers to increase the amount they want to buy and sellers to reduce the amount they are willing to sell. C) buyers to reduce the amount they want to buy and sellers to reduce the amount they are willing to sell. D) buyers to increase the amount they want to buy and sellers to increase the amount they are willing to sell.