Asset-price bubbles ________
A) are a relatively recent phenomenon
B) end with an increase in asset prices
C) have been a feature of market economies for centuries
D) are likely to be prevented by advances in computer technology and telecommunications
C
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For any given tax, imposing a tax in a market with a highly inelastic demand will:
A. cause more deadweight loss than a market with an elastic demand. B. generate higher revenues than a market with an elastic demand. C. Both of these statements are true. D. Neither of these statements is true.
A constant-cost industry is more likely to arise in a market where:
A. the industry takes only a small portion of the resources available. B. the industry takes only a large portion of the resources available. C. inputs have very different levels of quality. D. firms have large fixed costs and small marginal costs.
The price elasticity of demand for food is
A. Perfectly inelastic. B. Perfectly elastic. C. Relatively inelastic. D. Relatively elastic.
If all conditions for a perfectly competitive market are met,
A) firms face sunk cost when entering the market. B) firms' demand curves are horizontal. C) the market demand curve is horizontal. D) the firms' demand curves are downward-sloping.