A firm faces a small number of competitors. This firm is competing in
A) a monopoly.
B) monopolistic competition.
C) an oligopoly.
D) perfect competition.
E) a perfect multi-firm monopoly.
C
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Insurance is possible and can be profitable because of
A) private information. B) adverse selection. C) moral hazard. D) consumers are risk aversion.
Provisions in loan contracts that prohibit borrowers from engaging in specified risky activities are called
A) proscription bonds. B) restrictive covenants. C) due-on-sale clauses. D) liens.
Suppose two firms with differentiated products are competing on price. The reaction curve for Firm 1 is P1 = 4 + 0.5 P2, and the reaction curve for Firm 2 is P2 = 4 + 0.5P1. What is the equilibrium price outcome in this market?
A) P1 = P2 = 4 B) P1 = P2 = 6 C) P1 = P2 = 8 D) P1 = 6 and P2 = 8
A market in which resources are traded is known as a(n)
a. factor market b. perfectly competitive market c. open market d. closed market e. equilibrium market