A competitive market is one in which:
A. government oversees its operation.
B. individual sellers and buyers have a lot of influence over market price.
C. fully informed price-taking buyers and sellers easily trade a standardized good.
D. few large sellers compete for a majority of the market share.
Answer: C
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Why do private markets tend to undersupply nonrivalrous goods?
a. Because free riders will refuse to pay for these goods. b. Because the tragedy of the commons will reduce their value to zero. c. Because people have an incentive to understate their preferences for these goods. d. Because the efficient price for these goods is zero.
An individual's value for a good or service is the
a. The amount of money he or she used to pay for a good b. The amount of money he or she is willing to pay for it c. The amount of money he or she has to spend on goods d. None of the above
Marginal costs rise if there are increasing returns
Indicate whether the statement is true or false
If the marginal propensity to consume is 0.5, what is the value of the expenditure multiplier?
a. 1.0 b. 1.5 c. 2.0 d. 0.5 e. 10.0