Suppose that firm A obtained a patent for a new medication that cures certain types of cancer. Which assumption of the supply-and-demand model does not hold in this example?
A) Everyone is a price taker.
B) Products are homogeneous.
C) Trading costs are low.
D) Everyone has full information about the price and quality of goods.
A
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National defense services provided by the military are:
A. excluded from GDP because they are intermediate goods. B. included in GDP at cost. C. excluded from GDP because they are not sold in markets. D. included in GDP at market prices.
In the classical model, a tax on labor supply will
a. decrease the demand for labor, increase the real wage, decrease output, and reduce the price level. b. decrease the supply of labor, increase real wages, decrease output, and increase the price level. c. decrease the demand for labor, the real wage, decrease output, and increase the price level. d. have no effect on the labor market, but reduce output and increase the price level. e. increase both labor demand and supply, which will increase output and the price level.
The components of the U.S. current account balance are:
a. goods, services, expense receipts and payments, and unilateral transfer. b. goods, services, income receipts and payments, and unilateral transfer. c. goods, services, and unilateral transfer. d. income receipts and payments, and unilateral transfer.
Braden says that $400 saved for one year at 4 percent interest has a smaller future value than $400 saved for two years at 2 percent interest. Lefty says that the present value of $400 to be received one year from today if the interest rate is 4 percent exceeds the present value of $400 to be received two years from today if the interest rate is 2 percent
a. Braden and Lefty are both correct. b. Braden and Lefty are both incorrect. c. Only Braden is correct. d. Only Lefty is correct.