To describe recessions as a "cluster of errors" in the economy means
A) markets never clear, even in the best of times.
B) something has caused people to systematically misread the signals provided by the market process.
C) the laws of supply and demand have failed to work.
D) monopolies force people out of work.
B
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A firm's decision to invest in a project is based on the
A) real interest rate and expected total revenue. B) nominal interest rate and expected total revenue. C) nominal interest rate and the expected profit. D) real interest rate and the expected profit.
Which of the following conditions does not need to be satisfied in order to practice price discrimination?
a. a perfectly elastic demand curve b. a negatively-sloped demand curve for the firm's output c. the ability to identify customers who are willing to pay more for the good d. the ability to identify customers who are not willing to pay more e. the ability to prevent resale of the good
Three accountants can prepare 5 tax returns a day and four accountants can prepare 7 tax returns a day. If the marginal revenue product of hiring the fourth accountant is $300, then in a perfectly competitive product market the price of each tax return is
a. $250 b. $100 c. $300 d. $200 e. $150
If a monopolistically competitive firm decides that its cost and revenue data indicate that it should not shut down, it will end up producing where
a. MR > AVC b. MR > ATC c. MR > MC d. MR = P = ATC = MC e. MR = MC