Which of the following conditions define a perfectly competitive market?
a. The transaction costs are very high.
b. Information is available to participants at a high cost.
c. The product is homogenous.
d. There are limited number of buyers and sellers.
C
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Why do few avocados rot, even though in some seasons of the year far more avocados are harvested than in other seasons of the year?
A) Consumers realize it would be inefficient to let avocados rot. B) Growers vary their advertising efforts with the season of the year. C) Prices fluctuate sharply as supplies increase or decrease. D) The taste for avocados varies proportionately to the supply.
According to the "beachhead effect," in order to undo the effects of a strong-dollar period, the real value of the dollar
A) must fall to at least half of its value before appreciation of the dollar began. B) must fall to the value it had before appreciation of the dollar began. C) must fall to a much lower level than it had before appreciation of the dollar began. D) must actually appreciate before it depreciates to undo the effects of a strong-dollar period.
Attempts to fine-tune the economy through counter-cyclical fiscal policy
A) demonstrated their effectiveness in the 1930s.
B) demonstrated their effectiveness during World War II.
C) demonstrated their effectiveness between 1945 and 1960.
D) have not yet demonstrated their effectiveness.
In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
Which diagram above illustrates the effects on the peanut butter market, if severe flooding destroys a large portion of the peanut crop in the economy?
A. (1) B. (2) C. (3) D. (4)