The military is not a perfectly competitive market because
A) there is only one buyer, i.e., the government, for military goods/services.
B) there is imperfect information, i.e., intelligence branches.
C) there are heterogeneous goods/services because each military branch provides different goods/services.
D) All of the above
D
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Refer to Figure 4-1. If the market price is $2.50, what is the consumer surplus on the first ice cream cone?
A) $0.50 B) $1.00 C) $3.50 D) $9.00
Economists use the term shocks to mean
A) unexpected government actions that affect the economy. B) typically unpredictable forces that have major impacts on the economy. C) sudden rises in oil prices. D) the business cycle.
If wage rates are lower in Mexico than in Germany, labor costs per unit of output can still be higher in Mexico
a. True b. False
If monopolistically competitive firms earn short-run economic profits, we expect to see
A) new firms enter the industry, which shifts the demand curves of the existing firms to the left until firms earn zero economic profits. B) new firms trying to enter the industry, but unable to do so because of barriers to entry. C) existing firms altering their scale of plant to try to capture larger profits. The combined effect is to cause all firms to earn zero economic profits. D) existing firms increasing prices to try to capture larger economic profits.