When economies of scale are present, but are not sufficiently large to generate a natural monopoly, the expected market structure is:
A. monopoly.
B. monopolistic competition.
C. perfect competition.
D. oligopoly.
Answer: D
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A possible market solution that a reputable firm can engage in when faced with the lemons problem is
A) to offer a warranty. B) to engage in externalities. C) to create asymmetric information. D) to use average cost pricing.
From 2006 through August 2011, the US dollar fell in value from 8 Chinese Yuan to 6.4 Chinese Yuan. During that time we would say that relative to the US dollar, the Yuan has appreciated in value
a. True b. False
The wealthy nations of the world have
A. the largest populations. B. more supplies of natural resources. C. more supplies of capital. D. larger labor forces.
The invisible hand refers to the:
A. fact that the U.S. tax system redistributes income from rich to poor. B. notion that, under competition, decisions motivated by self-interest promote the social interest. C. tendency of monopolistic sellers to raise prices above competitive levels. D. fact that government controls the functioning of the market system.