All of the following characteristics are common to both monopolistic competition and perfect competition except
A) firms act to maximize profit.
B) entry barriers into the industries are low.
C) the market demand curves are downward-sloping.
D) firms take market prices as given.
Answer: D
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Fractional reserve banking refers to a system in which the depository institution
A) holds reserves equal to its deposits. B) holds reserves greater than its deposits. C) holds reserves less than its deposits. D) holds zero reserves.
The basic economic problem is:
a. inflation. b. unemployment. c. poverty. d. scarcity. e. lack of money.
Subsidies _______________the cost of production, encouraging current producers to stay in the market and new producers to enter.
Fill in the blank(s) with the appropriate word(s).
Which situation below would represent a shortage in the oil market?
A. quantity demanded is 5.2 million; quantity supplied is 5.1 million. B. market price $75.00 per barrel; equilibrium price $81.00 per barrel. C. market price $81.00 per barrel; equilibrium price $75.00 per barrel. D. quantity supplied this year is 25% greater than quantity supplied last year.