Which of the following is a characteristic of a competitive market?
a. There are many barriers to entry.
b. Firms sell differentiated products.
c. Buyers and sellers are price takers.
d. There are many buyers but few sellers.
Answer: c. Buyers and sellers are price takers.
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Suppose we examine how the consumer's optimum changes when the price of good X changes, while the consumer's tastes, income, and the price of all other goods are held constant. This procedure is used to derive
a. the Engel curve for good X. b. the (ordinary) demand curve for good X. c. the compensated demand curve for good X. d. the substitution and income effects for good X.
The group responsible for deciding on monetary policy is the
A) Federal Advisory Council. B) Board of Governors only. C) Federal Open Market Committee. D) group of 12 Federal Reserve Bank presidents only.
_____ goods are rivalrous in consumption and nonexcludable
Fill in the blank(s) with the appropriate word(s).
Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?
A. equilibrium price decreases B. equilibrium quantity increases C. both equilibrium price and quantity increase D. equilibrium quantity decreases E. equilibrium price increases