Although price searchers can set their prices, the prices they can set are still affected by market conditions.
1. True or False: Although price searchers can set their prices, the prices they can set are still affected by market conditions.
2.Suppose firms in a competitive price-searcher market with low barriers to entry are earning an economic profit.
Firms will (exit /enter) this market until economic profits are (positive/ negative/zero).
Answer:
1. True.
2. Enter, zero
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In a production possibilities frontier graph, the cost of producing more units of a good is measured by the
A) dollar value of the additional output. B) area in the arc between the PPF and a straight line drawn between the starting point and the ending point. C) dollar value of the resources used to produce the good. D) amount of the other good or service that must be forgone. E) None of the above answers is correct.
The expansion induced by a rise in the money stock will be greatest
A) the higher the level of capital mobility in an economy. B) the lower the level of capital mobility in an economy. C) when the economy has a fixed exchange rate. D) when this rise is fully sterilized by the monetary authority.