In a market for a homogeneous good, if sellers and buyers can enter or exit a market freely, the market is most likely:
A. an oligopoly.
B. a monopolistically competitive market.
C. a monopoly.
D. a perfectly competitive market.
Answer: D
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If the price level rises relative to the money wage rate, firms ________ the quantity of labor they demand and workers ________ the quantity of labor they supply
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
According to purchasing power parity, the foreign exchange market will
A) undervalue the dollar if inflation in the United States is greater than it is elsewhere. B) no longer demand dollars if the inflation rate in the United States exceeds that of other nations. C) adjust the value of the exchange rate to reflect differing inflation rates between nations. D) result in a flow of dollars out of the United States whenever its rate of inflation is below that of other nations.
In a market economy, income depends mostly on
a. productivity b. luck c. age d. sex e. discrimination
Microeconomics differs from macroeconomics in that microeconomics focuses on:
A. the performance of the entire economy. B. government policies designed improve the performance of the national economy. C. the choices made by individuals and the implications of those choices. D. issues such as inflation, unemployment and economic growth.