What does it mean to say that a perfectly competitive firm is a price taker? Can't a firm set any price it chooses?
What will be an ideal response?
A firm can set any price it chooses, but in a perfectly competitive industry, it will do no good to choose anything but the market price. At a higher price, no one will buy (since products are assumed to be identical) and at a lower price, you lose revenue without gaining sales, since you can presumably sell all you want to at the market price. Thus the firm is said to be a price taker.
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The short-run Phillips curve shows ________ between the unemployment rate and the inflation rate, and the long-run Phillips curve shows ________ between the unemployment rate and the inflation rate
A) a positive relationship; a negative relationship B) a negative relationship; a positive relationship C) no relationship; a negative relationship D) a negative relationship; no relationship E) no relationship; no relationship
Suppose the figure below shows Luke's demand curve for check-ups along with the supply curve for check-ups. 
If Luke had first-dollar medical insurance, then he would choose to have ________ check-ups a year.
A. 4 B. 5 C. 3 D. 2