Which of the following markets is an example of monopolistic competition?
(A) Oranges
(B) Electricity
(C) Bus tickets
(D) Bookbags
Ans: (D) Bookbags
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A restaurant owner hires a waiter to serve food to customers and clear the tables. The owner wants the waiter to be prompt in bringing out the food and clearing the table once the guests are finished with their meal. The waiter is paid a salary and cannot accept tips. The waiter would prefer to check their Facebook account and take their time waiting the tables. If the waiter does spend
considerable time checking their Facebook while the owner is not at the restaurant, which of the following is true? A) This is an example of the lemons problem and the waiter is the agent and the owner is the principal. B) This is an example of the principal-agent problem and the waiter is the agent and the owner is the principal. C) This is an example of adverse selection and the waiter is the agent and the owner is the principal. D) This is an example of the principal-agent problem and the waiter is the principal and the owner is the agent.
A public museum is an example of a
A) government-sponsored good. B) public good. C) good which generates a positive externality. D) good which generates a negative externality.
Resource price differentials that trigger the reallocation of resources so as to equalize payments for similar resources are known as
a. permanent differentials b. trigger price differentials c. reallocation differentials d. equal differentials e. temporary differentials
A requirement that the budget be balanced in each calendar year is a misguided overreaction to the fear that in some cases
a. budget surpluses can become too large. b. budget deficits can become too large. c. interest rates would rise. d. interest rates would fall.