Economics (McConnell) AP Edition, 19th Edition

Chapter 8: Pure Competition in the Short Run

Web-based Questions

1
You are a pure competitor—What was your revenue yesterday? Suppose that you operate a purely competitive firm that buys and sells foreign currencies. Also suppose that yesterday your business activity consisted of buying 100,000 Swiss francs at the market exchange rate and selling them to U.S. travelers to Switzerland for a 3 percent commission. Go to the Federal Reserve Web site at www.federalreserve.gov and select, in order, Economic Research and Data Download Program, and Foreign Exchange Rates. What was your total revenue in dollars yesterday (be sure to include your commission)? Why would your profit for the day be considerably less than this total revenue?
2
Is farming perfectly competitive? Consider whether the US farming industry is perfectly competitive. Go to the US Department of Agriculture's Economic Research Service website (http://www.ers.usda.gov/Emphases/Competitive/), click "Farm Income," and consider the information in the articles on family farms. Does farming in the US have the characteristics of perfect competition?
McConnell Economics Nineteenth Edition Large Cover Image
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