An essential characteristic of a perfectly competitive market is:
A. goods are standardized.
B. sellers are price makers.
C. buyers and sellers share market power.
D. goods are unique.
Answer: A
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Evaluating risk requires that:
A. we consider uncertain costs or benefits of an event or choice. B. we think about different possible outcomes. C. we accept that our best guess about future costs and benefits could be wrong. D. All of these statements are true.
The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected,
a. production is more profitable and employment rises. b. production is more profitable and employment falls. c. production is less profitable and employment rises. d. production is less profitable and employment falls.
Which of the following represents a tight monetary policy by the Fed?
A. The required reserve ratio increases, the discount rate increases, and the Fed buys government securities. B. The required reserve ratio increases, the discount rate increases, and the Fed sells government securities. C. The required reserve ratio increases, the discount rate decreases, and the Fed sells government securities. D. The required reserve ratio decreases, the discount rate increases, and the Fed buys government securities.
Suppose the prices of petroleum products, including gasoline and fuel oil, fell sharply. Which of the following would most likely occur as the result of the lower prices of petroleum products?
A. A reduction in the consumption of gasoline. B. An increase in demand for solar heating systems. C. An increase in demand for smaller, more efficient automobiles. D. A reduction in the demand for home insulation products.