Which of the following characteristics is common to monopolistic competition and perfect competition?
A) Each firm faces a downward-sloping demand curve.
B) Entry barriers into the industry are low.
C) Firms take market prices as given.
D) Firms produce identical products.
B
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The value of intermediate goods is excluded from the measurement of GDP in order to:
A. adjust for inflation. B. index economic activity. C. avoid double counting. D. measure GDP in constant prices.
The percentage change in one's real income can be approximated by the percentage change in
A. price level minus the percentage change in nominal income. B. nominal income minus the percentage change in the price level. C. nominal income divided by the percentage change in price level. D. price level divided by the percentage change in nominal income.
An interest-earning account that can be withdrawn at any time without payment of a penalty is a
A) money market deposit account. B) certificate of deposit. C) savings deposit. D) time deposit.
The above table shows the market shares for all the landscaping services in a suburban area. Which of the following mergers would cause the greatest increase in the four-firm concentration ratio?
A) A and B B) D and E C) E and F D) six of the smallest firms