The two characteristics of a competitive market are 1) many buyers and sellers in the market and 2) the goods offered by the various sellers are highly differentiated.
a. True
b. False
Indicate whether the statement is true or false
Ans: b. False
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Why does the Fed attempt to achieve a low, stable rate of inflation rather than an inflation rate of 0%?
What will be an ideal response?
Laws that are used to prevent firms from colluding and setting high prices are called
A) anti-trust laws. B) price ceiling laws. C) anti-cartel laws. D) anti-competition policies.
Which of the following is a major disadvantage of setting the price of a good below equilibrium and using waiting in line rather than price to ration the good?
a. Compared to price rationing, waiting in line is unfair since it is easier for those with higher incomes to wait in line. b. Waiting in line imposes a cost on the consumer; paying higher prices does not. c. Both waiting in line and higher prices are costly to consumers, but unlike the payment of a higher price, waiting in line does not provide suppliers with an incentive to expand future output. d. Waiting in line benefits consumers at the expense of producers.
Consider a bond with a $100,000 face value that matures in 1 year. If the bond pays a nominal interest rate of 8%, what is the bond's discount?
a. $8,000. b. $7,407. c. $4,000. d. $1,250.