A farmer has many competitors and exists in a market structure known as perfect competition. This means that price is determined outside of the individual farmer's ability to charge a price higher than the going market for a bushel of wheat, hence the
farmer is
A) a price maker and can therefore charge different customers different prices.
B) always able to price produce above the competition and earn a larger profit.
C) never able to determine any prices he charges for anything, such as soybeans.
D) a price taker and cannot affect the market price of wheat.
Answer: D
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If the demand effect dominates during a currency depreciation, then
a. real GDP should fall. b. real GDP should increase. c. the price level should fall. d. net exports should decrease.
Starting from short-run equilibrium, the following occurs: labor productivity rises and individuals expect higher (future) incomes. What is the effect on the price level and Real GDP in the short run?
A) Real GDP falls and the price level necessarily rises. B) Real GDP rises and the effect on the price level cannot be determined. C) Real GDP rises and the price level necessarily falls. D) Real GDP falls and the effect on the price level cannot be determined. E) Real GDP rises and the price level necessarily rises.