Which is a feature of a purely competitive market?
A. There are significant barriers to entry into the industry.
B. There are price differences between firms producing the same product.
C. The industry's demand curve is perfectly elastic.
D. Products are standardized or homogeneous.
Answer: D
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If the absolute value of slope of the demand curve is 2.5, price is $6 per unit, and the quantity demanded is 8 units, then the price elasticity of demand is:
A. 1. 6. B. 0.3. C. 1.875. D. 0. 533.
If the Federal Reserve Banks goal was to use open market operations to expand the economy it could move from:
A. MS1 to MS3
B. MS3 to MS2
C. MS4 to MS3
D. MS2 to MS1
If something happens to alter the quantity demanded at any given price, then the demand curve shifts
a. True b. False Indicate whether the statement is true or false
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. Kate decides to play the second game. Kate's expected value of payoff is:
A. $5.00. B. $5.75. C. $4.00. D. $4.50.