In the perfectly competitive market, all firms in the market are assumed to be producing:
A. identical products.
B. differentiated products.
C. products that are heavily advertised.
D. complementary products.
Answer: A
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In the above figure, if a Medicare subsidy that had previously been paid by the government has now been eliminated, the result will be
A) an increase in the price received by producers, from P0 to Ps. B) a decrease in the price received by producers, from Ps to P0. C) an increase in the price paid by consumers, from P0 to Ps. D) a decrease in the price paid by consumers, from Ps to P0.
According to the classical economists, unemployment was a temporary deviation from equilibrium, and certain forces in the economy would return it to full employment. Such forces did not include
a. price competition. b. wage competition. c. a variable rate of interest. d. discretionary government spending.
Which of the following is an example of an automatic stabilizer?
a. public works b. unemployment compensation c. interest rates d. highway spending
Andy wants to maximize his grade-point average. Having spent six hours studying for his final exam in economics, Andy calculates his grade and discovers that even with a perfect score on the final, he will not pass the course. He decides to study two more hours so he will not have wasted the first six hours. Is this a good decision? Why or why not?