If the demand in a perfectly competitive market decreases, the price will:
A. temporarily increase.
B. increase permanently.
C. temporarily decrease.
D. decrease permanently.
Answer: C
You might also like to view...
Explain carefully the relationship between a confidence interval, a one-sided hypothesis test, and a two-sided hypothesis test. What is the unit of measurement of the t-statistic?
What will be an ideal response?
Jobs that require more costly training generally have
a. higher wages b. lower employment levels c. less human capital required d. higher personal risk levels e. lower wages
Suppose a country attempts to be self-sufficient and doesn't trade with any other countries. From an economic perspective, citizens of this nation can be expected to
a. gain materially from this policy because they can consume more goods over time than if they engaged in trade with foreigners. b. produce less total value than they could if they specialized and engaged in trade with other nations. c. gain from more rapid growth since home markets are reserved for home producers. d. be just as well off without trade since the value of what is sent to other nations in trade just equals the value of what is received in trade.
In addition to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade. Consider the following scenario:
Without free trade, Sapphira has market power as a local producer. Once free trade is implemented in the local economy, Sapphira is no longer able to raise its prices above competitive levels. The previous scenario represents which of the following benefits of free trade? a. Lower costs through economies of scale b. Increased competition c. Increased variety of goods d. An enhanced flow of ideas