A market in which there are many firms each selling differentiated products is most likely a ________ market.
A. perfectly competitive
B. monopoly
C. monopolistically competitive
D. natural monopoly
Answer: C
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The United States produces ____ of what it consumes, and consumes ____ of what it produces.
A. little; little B. little; most C. most; little D. most; most
Suppose an individual consumes just pizza and soda. Using a graph, explain how the substitution bias causes the Lespeyres price index to overstate the true change in the cost of living resulting from an increase in the price of pizza.
What will be an ideal response?
In a reserve currency system (such as the Bretton Woods system or the European ERM), currencies peg to a reserve currency. As a result:
A) only the reserve currency country has monetary autonomy. B) all countries, other than the reserve currency country, have monetary autonomy. C) all countries have monetary autonomy. D) no country has monetary autonomy.
An external cost, such as the cost generated by pollution, is
A. a cost paid by producers of the product. B. a cost paid by a third party or by society at large. C. a cost paid by consumers of the product. D. not a true opportunity cost of production.