Firms in imperfectly competitive markets are
A. completely inefficient.
B. price takers.
C. more efficient than firms in perfectly competitive industries.
D. price makers.
Answer: D
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One reason why the price elasticity of supply for DVD players is greater than one is that
A) the cost of producing DVD players is small. B) the storage of DVD players is not possible. C) DVD players can be easily stored. D) the demand for DVD players is fairly large. E) DVD players require relatively advanced technology for their production.
If the cross elasticity of demand between goods A and B is positive
A) the demands for A and B are both price elastic. B) the demands for A and B are both price inelastic. C) A and B are complements. D) A and B are substitutes.
In a circular-flow diagram, total income and total expenditures in an economy are:
A) equal because firms are ultimately owned by households. B) equal only if there is no saving. C) equal because every transaction has a buyer and a seller. D) always equal because some people's income is not for production.
A business enterprise in which employees must belong to the union before they can be hired is
A) a closed shop. B) a union shop. C) a jurisdictional dispute. D) an industrial union.