Which of the following is not a characteristic of a perfectly competitive market?
A. There is a large number of small firms.
B. Firms sell a homogeneous product.
C. Firms can easily enter or exit the market.
D. Firms are price makers, not price takers.
Answer: D
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All mutually beneficial trades have taken place. This implies that
A) the production possibilities curve is bowed out. B) society is inside the production possibilities curve. C) economic efficiency prevails in the society. D) society is on the constant cost portion of its production possibilities curve.
The television network newscaster reports that the national inflation rate the past year equaled 4 percent. This report would be of particular interest to a
A. microeconomist. B. normative economist. C. macroeconomist. D. social science economist.
The Business Cycle Dating Committee, a part of the ________, officially decides when a recession begins and ends
A) federal government B) Bureau of Labor Statistics C) National Bureau of Economic Research D) Federal Reserve
Answer the following questions true (T) or false (F)
1. The U.S. government would never approve a proposed merger between two firms that could significantly increase the newly merged firm's market power even if the efficiency gains from the newly merged firm could make consumers better off. 2. Merger guidelines developed by the Antitrust Division of the U.S. Department of Justice use four-firm concentration ratios as measures of concentration. 3. Local or state offices of the Department of Justice usually set prices for natural monopolies in their jurisdictions.