Which of the following is not a characteristic of a monopolistically competitive market?
A. Firms hold patents on their products.
B. The products that firms sell are slightly different.
C. Firms have some control over price.
D. There are no artificial barriers to entry.
Answer: A
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Answer the next question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10%. If the price of this bond falls by $200, the interest rate will
A. fall by 2.5 percentage points. B. fall by 5 percentage points. C. rise by 5 percentage points. D. rise by 2.5 percentage points.
If the government imposes a specific tax on a monopoly, the consumer's tax incidence
A) can exceed 100%. B) will always be between 0-100%. C) may be negative. D) will be the same as when the tax is imposed on a perfectly competitive firm.
The non-exclusion principle means
A) no one can be excluded from the benefits of a public good, even if the person does not pay for it. B) no one can be excluded from the benefits of a private good, even if only one person pays for it. C) no one who pays for a public good can be excluded from receiving the benefits of a public good. D) people who do not pay for a public good can be excluded from receiving its benefits.
If inflation is much higher than originally anticipated, _____ are better off and _____ are worse off
a. lenders who extended loans at fixed interest rates; people who borrowed at fixed interest rates b. people who borrowed at fixed interest rates; banks that extended loans at fixed interest rates c. retired people living on a fixed income; people who had borrowed fixed interest rate loans d. people who deposited their savings at fixed interest rates; banks that accepted deposits at fixed interest rates e. oil refiners who signed labor contracts agreeing to pay their workers the cost-of-living wage; workers who receive that cost-of-living wage