In a market where all goods are perfect substitutes for each other,
a. the price elasticity of demand is 1.0 for all goods
b. the market is perfectly competitive
c. only one producer dominates
d. only a few firms can operate
e. brand loyalty is high
B
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In order for any given commodity to be considered money, it has to
A) be issued and controlled by some governmental institution. B) have some intrinsic value. C) be generally acceptable as a means of payment. D) be used in barter transactions. E) be convertible into gold or silver.
A player's best response is
A) the strategy that maximizes his payoff given what he thinks the other player will do. B) a dominant strategy. C) impossible to find when there isn't a Nash equilibrium. D) a way to avoid the prisoners' dilemma.
Most markets are not monopolies in the real world because
a. firms usually face downward-sloping demand curves. b. supply curves slope upward. c. firms usually equate price with marginal cost. d. there are reasonable substitutes for most goods.
Briefly explain the case for a negative income tax.
What will be an ideal response?