Which set of characteristics below best describes the basic features of monopolistic competition?
A. Easy entry, many firms, and standardized products
B. Barriers to entry, few firms, and differentiated products
C. Easy entry, many firms, and differentiated products
D. Easy entry, few firms, and standardized products
C. Easy entry, many firms, and differentiated products
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Mary is a low-risk applicant for a loan at a bank, while John is a high-risk applicant. If the bank increases the interest rates it charges on loans, _____
a. John is likely to leave the market for loans b. the problem of moral hazard will prevent John from getting a loan c. the commons problem will prevent Mary from getting a loan d. Mary is likely to leave the market for loans e. both Mary and John will leave the market for loans
The ease with which an asset can be converted into a medium of exchange is known as
a. volatility b. liquidity c. currency d. Gresham's Law e. speculative exchange
The natural rate of unemployment is the amount of unemployment
A) associated with the business cycle. B) equal to frictional plus structural unemployment. C) that exists when the economy goes into recession. D) that exists when the economy is in an expansion.
A cartel is a group of firms which agree to
A) behave competitively. B) raise the price of their product. C) lower the price of their product. D) increase the amount they produce.