A market is NOT contestable if:
A. existing firms cannot respond quickly to entry by lowering their price.
B. there are sunk costs.
C. consumers respond quickly to a price change.
D. all producers have access to the same technology.
Answer: B
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An increase in the demand for washing machines might be caused by
A. a decrease in the number of buyers. B. an expected increase in the price of washing machines. C. a decrease in the price of washing machines. D. an expected decrease in the price of washing machines.
Refer to the figure above. What is the producer surplus when the price is $50?
A) $100 B) $200 C) $400 D) $1,000
The reserve ratio is
A. the ratio of loans to available reserves. B. the ratio of available reserves to loans made. C. the percentage of every dollar deposited in a checking account that a bank may loan out. D. the percentage of every dollar deposited in a checking account that a bank must maintain in reserves.
If the budget line rotates, then we know that
A. the consumer was not maximizing their utility. B. their has been a change in the consumer's tastes. C. income has changed. D. the price of one of the goods had changed.