Which of the following is closest to the economist’s definition of perfect competition?
A. The airline industry
B. The soft drink industry
C. The fishing industry
D. Cellular telephone service
Answer: C
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Assume that Figure 4-16 shows the supply of steak. An increase in the price of cattle feed will change the supply from
A. S1to S2. B. S2to S1. C. S2to S3. D. S1to S3.
As the amount of labor input increases ________. This means that the marginal product of labor (MPL) ________
A) the slope of the production function increases; goes up B) the slope of the production function falls; declines C) the slope of the production function falls; goes up D) the slope of the production function increases; declines E) none of the above
When faced with a continual excess demand for foreign exchange, which of the following options can the government choose to eliminate the disequilibrium situation?
a. increase the peg or devalue b. engage in fiscal policy and raise the country's income level c. engage in monetary policy and lower interest rates d. increase the inflation rate e. decrease the peg or revalue
When economists look at the percentage change in quantity demanded for air travel generated by a change in income, they are looking at the
a. price elasticity of demand for air travel b. income elasticity of demand for air travel c. price elasticity of demand for airline tickets d. cross elasticity of demand for airline tickets e. cross elasticity of demand for airline travel