Figure 20-1
Which of the diagrams in Figure 20-1 shows the situation of an individual firm that hires labor in a perfectly competitive market?
A. A
B. B
C. C
D. D
Answer: D
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To be a natural monopoly a firm must
A) have significant network externalities. B) control a key resource input. C) have economies of scale that are so large that it can supply the entire market at a lower cost than two or more firms. D) be in a government-regulated market.
Because it is more extensive, first-degree price discrimination is more profitable for the firm than is third-degree price discrimination
Indicate whether the statement is true or false
Suppose you place your savings in a time deposit at the bank, and that bank lends some of those funds to a business that desires a loan. This is an example of
A) direct finance. B) indirect finance. C) asymmetric information. D) adverse selection.
Welfare banks are
A. illegal. B. check-cashing stores. C. credit unions operated by local welfare departments. D. bank branches located in poor neighborhoods.