Which of the following is always true in competitive price-taker markets?
a. There are more sellers than buyers.
b. Barriers to entry into the market are low.
c. The products of firms in the industry are differentiated.
d. The firms never earn economic profit.
B
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The growth of the Euromarkets resulted in
a. developing-country governments borrowing from European banks instead of American and Japanesebanks b. higher interest rates in Europe than in the U.S. and Japan c. a general trend toward substituting foreign aid for bank lending d. a general trend toward substituting bank lending for foreign aid e. none of the above
When does a higher wage rate lead to an increase in the number of work hours supplied by laborers?
a. Always. b. When the substitution effect outweighs the income effect. c. When the income effect outweighs the substitution effect. d. Never.
Behavioral economists criticize neoclassical models as being:
A. Messy and imprecise B. Accurate but artificially elegant C. Precise but inaccurate D. Vague but accurate
Suppose that Year 1 is the base year. Year 2 real GDP is
A) $200. B) $270. C) $310. D) $390.