Perfect competition is characterized by a(n)
a. large number of buyers and sellers, each one a price taker
b. single seller and many buyers
c. small number of sellers offering differentiated products
d. intense rivalry among several competitors
e. small number of buyers and sellers who negotiate the market price
A
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The components of aggregate expenditure that change when real GDP changes are known as
A) unplanned expenditure. B) induced expenditure. C) autonomous expenditure. D) changeable expenditure. E) planned expenditure.
Using the concept of income and substitution effects, explain how you might react to each of the following:
(a) You currently work 20 hours a week at $10 per hour and your employer tells you he must reduce your wage to $8 per hour. (b) The price of pizza doubles and the price of hamburgers remains constant.
When risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual, it is called:
A. diversification. B. risk analysis. C. risk aversion. D. risk pooling.
In a perfectly competitive market structure both buyers and sellers have equal access to information. This implies
A) the products sold will be alike. B) firms will move labor and capital in pursuit of profit-making opportunities to whatever business venture gives them the highest return on their investment. C) no one buyer or seller has any influence on price. D) consumers are able to find out about lower prices charged by other firms.