Pedro goes to the local farmer's market and is just as happy buying corn from the first vendor as he is from the second vendor. This example describes which of the following characteristics of perfect competition?
A. large number of small firms
B. homogeneous product
C. very easy entry and exit
D. differentiated product
Answer: B
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The ongoing normal creation and destruction of jobs creates
A) frictional unemployment. B) structural unemployment. C) avoidable unemployment. D) cyclical unemployment. E) destructive unemployment.
Why does a price ceiling set below the equilibrium price of a good lead to a shortage of the good in the market?
What will be an ideal response?
Teddy buys only chocolate chip cookies and hot chocolate and spends all of his income on the two items. Suppose that Teddy's marginal utility per dollar from cookies exceeds that from hot chocolate. Teddy can make himself better off if he buys
A) more cookies and less hot chocolate. B) fewer cookies and more hot chocolate. C) an equal amount of cookies and hot chocolate. D) only hot chocolate.
Money serves as all of the following EXCEPT
A) a medium of exchange. B) a unit of account. C) a store of value. D) a symbol that is made of or can be redeemed for a fixed amount of precious metal. E) a highly liquid asset.