In perfectly competitive markets, some buyers do not have full information about the products available.
Answer the following statement true (T) or false (F)
False
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Which of the following is not a potential problem in using corrective taxation to deal with a negative externality?
a. Measuring the cost of the externality. b. Estimating the supply curve of the externality creator. c. Determining who is responsible for the externality. d. Determining how the tax should be applied.
An externality arises when a person engages in an activity that influences the well-being of
a. buyers in the market for that activity and yet neither pays nor receives any compensation for that effect. b. sellers in the market for that activity and yet neither pays nor receives any compensation for that effect. c. bystanders in the market for that activity and yet neither pays nor receives any compensation for that effect. d. Both (a) and (b) are correct.
As the interest rate __________, the opportunity cost of holding money __________ and individuals choose to hold __________ money
A) increases; increases; more B) increases; decreases; more C) increases; decreases; less D) decreases; increases; more E) decreases; decreases; more
Which of the following items can you definitively say is part of the underground economy?
A. Income from legal pursuits. B. Payments to family members for performing household tasks. C. Unreported income. D. Child care services provided by a legitimate company.