Which of the following is NOT a key assumption of the classical model?
A. People are motivated by self-interest.
B. Wages and prices are flexible.
C. People cannot be fooled by money illusion.
D. There is a single monopoly seller in many markets for goods and services.
Answer: D
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In the figure above, international trade ________ consumer surplus in the United States by ________
A) decreases; $2.88 billion B) decreases; $1.92 billion C) increases; $2.88 billion D) increases; $4.8 billion
In Figure 13-3 above, suppose that the Fed maintains a fixed real money supply and that commodity demand is also fixed. The range of shifts in the LM curve, LM1 to LM2 can then only be explained by
A) changes in the velocity of money. B) changes in the price level. C) changes in the demand for money. D) A and C.
Use the above figure. The profit-maximizing output and price is
A) 600 and $16, respectively. B) 600 and $10, respectively. C) 600 and $8, respectively. D) 800 and $10, respectively.
For a monopsonist, the supply of labor facing the firm is:
A. an insignificant portion of the market supply. B. perfectly horizontal. C. identical to the supply curve facing the market. D. the summation of each firm's demand for labor.