A perfectly contestable market is one in which there are excessive costs to entry and exit.
Answer the following statement true (T) or false (F)
False
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Of age, marital status, family size, education, and race, which is the single biggest factor affecting the household income distribution?
What will be an ideal response?
Suppose workers agreed to a contract that guaranteed a real wage increase of 3 percent per year. If the inflation rate was 7 percent over the following year, what is the required increase in the nominal wage to meet the contract requirements?
a. 10 percent b. 3 percent c. 4 percent d. 7 percent e. 1 percent
Which of these events would cause the consumer price index to overstate the increase in the cost of living?
a. Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price. b. Energy prices decrease, and consumers respond by buying more gas and electricity. c. A new good is introduced that renders cellular telephones inferior and obsolete. d. All of the above are correct.
The ________ states that all else equal, taxes that are neutral with respect to economic decisions are generally preferable to taxes that distort economic decisions.
A. law of tax incidence B. principle of neutrality C. principle of second best D. principle of excess burden