To determine whether a market is perfectly competitive, economists examine the
A. number of firms in the market.
B. similarities among the products of the different firms in the market.
C. ease of entry and exit by firms in the market.
D. All of the responses are correct.
Answer: D
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When the law of diminishing returns takes effect
A) firms must add increasingly more input if they are to maintain the same extra amount of output. B) firms must add decreasingly more input if they are to maintain the same extra amount of output. C) more input must be added in order to increase its output. D) a firm must always try to add the same amount of input to the production process.
Which of the following is a source of information that helps consumers acquire information about the quality of a good or service?
a. brand names b. franchising c. consumer ratings magazines d. all of the above
A large open economy increases its desired saving. This causes the world real interest rate to ________ and the country's current account balance to ________.
A. fall; fall B. fall; rise C. remain unchanged; fall D. remain unchanged; rise
Refer to the diagram pertaining to two nations and a specific product. The equilibrium world price occurs at:
A. F.
B. I.
C. G.
D. J.