An important difference between a perfectly competitive firm and a monopolist is
A) the size of the firms.
B) the shape of the demand curve each faces.
C) the goals of the owners of the firms.
D) a monopolist normally produces a service, while a perfect competitor normally produces a good.
Answer: B
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Suppose that the economy is currently at full employment. All other things being equal, if central bank implements contractionary policy, then the appropriate fiscal policy is to
a. increase taxes. b. reduce government spending. c. balance the budget. d. increase a budget deficit.
In the circular flow model, producers
A) sell goods and services in the input market. B) and households spend earnings from resource sales on goods and services in the factor market. C) hire resources sold by households in the factor market. D) spend earnings from resource sales on goods and services in the product market.