Perfect competition is the term used to describe:
a. an industry in which a few price-taking firms produce identical products
b. an industry in which numerous price-taking firms produce identical products.
c. an industry in which firms are price takers and compete for market share by varying the qualitative characteristics of products.
d. an industry in which numerous firms are price makers and produce identical products.
b
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The theory of consumer behavior is based on certain assumptions. The set of four basic assumptions includes:
A) completeness. B) transitivity. C) intransitivity. D) Both A and B are correct. E) Both A and C are correct.
If the interest rate increases, there is a(n)
A) increase in the demand for money. B) decrease in the demand for money. C) increase in the quantity of money demanded. D) decrease in the quantity of money demanded.
In the short run, a firm may have accounting losses and remain in operation.
Answer the following statement true (T) or false (F)
Imagine two cities, Hometown and Visitorsville, where the rich, middle, and poor income recipients in one city have annual incomes identical to their counterparts' incomes in the other city. In Hometown, the poorest families one year almost always end up as the richest families the next year and become middle-income families the year after that. In Visitorsville, however, the poor remain poor and
the rich remain rich. Which of the following is true about the two cities? a. Annual data on the distribution of income will indicate that the degree of income inequality in the two cities is identical. b. The degree of lifetime income inequality in the two cities is identical. c. The income mobility of people in the two cities is identical. d. The distribution of annual income is more unequal in Visitorsville.