Perfectly competitive markets are efficient because
A) they always reach equilibrium.
B) firms in the market are price takers.
C) the cost to society for producing the goods is exactly equal to the value that society places on the good.
D) the long run equilibrium assures that the prices of resources will not increase.
Answer: C
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The marginal revenue curve of a perfectly competitive firm
A) has a vertical intercept equal to exactly one-half of the vertical intercept for the demand curve. B) lies below the demand curve and above the average revenue curve. C) intersects the average revenue curve from above at the maximum point of the average revenue curve. D) is also the demand curve faced by the firm.
Which of the following is a common reaction to an increase in the interest rate?
a. A decline in oil prices b. A war c. A decrease in spending on new homes d. An expansion e. An increase in military spending