In pure competition, the marginal revenue of a firm always equals:
A. average total cost.
B. marginal cost.
C. product price.
D. total revenue.
Answer: C
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A price ceiling does NOT lead to a deadweight loss if ________
A) the equilibrium market price lies below the price ceiling B) the equilibrium market price lies above the price ceiling C) the price elasticity of market demand is greater than 1 D) the price elasticity of market supply is greater than 1
Which of the following does NOT appear on a prospectus?
A) The price of the securities being issued B) The salaries of the borrowing firm's top executives C) Audited financial statements of the borrower D) An explanation of any unusual rights granted to stockholders
The concept of holding reserves, such as gold, that are less than the value of the total deposits
A) is known as fractional reserve banking.
B) has been illegal since the passage of the Financial Services Modernization Act of 1999.
C) is known as non-credit banking.
D) None of the above are correct.
When consumers have asymmetric information and when search costs and the number of firms are large, a single-price equilibrium in a competitive market
A) is impossible. B) occurs when price equals average cost. C) occurs when price equals marginal cost plus the search cost. D) occurs when the price is the price a monopoly would set.