A profit-maximizing firm in a perfectly competitive market can choose to:
a. produce whatever quantity it wants.
b. increase the price of a good in order to increase its revenue
c. decrease the price of a good in order to increase its share in the market.
d. increase its advertisement expenditure in order to increase the value of its unique product.
a
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If inflation rises or falls faster than people forecast in the short run but not in the long run, what are the shapes of the Phillips curves?
a. The Phillips curve is vertical in the short run, and upward sloping in the long run. b. The Phillips curve is downward sloping in the short run, and vertical in the long run. c. The Phillips curve is upward sloping in the short run, and horizontal in the long run. d. The Phillips curve is vertical in the short run and long run.
When producers (say, of roads) are not able to make all consumers pay for enjoying their product (i.e., the roads), they tend to see a:
A. Marginal cost of production that is too low, and there is a supply-side market failure B. Marginal benefit of production that is too high, and there is a demand-side market failure C. Marginal cost of production that is too high, and there is a supply-side market failure D. Marginal benefit of production that is too low, and there is a demand-side market failure