When all the conditions for perfect competition are met,
A. the system produces the goods and services consumers want.
B. resources are allocated among firms efficiently.
C. final products are distributed among households efficiently.
D. All of the above are correct.
Answer: D
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An excise tax of $1.00 per gallon of gasoline placed on the suppliers of gasoline would shift the supply curve
A. up by less than $1.00. B. down by $1.00. C. up by $1.00. D. down by more than $1.00.
The primary difference between monopolistic competition and perfect competition is:
A. Both the ease of entry and exit into the industry and the number of firms in the market are correct. B. the number of firms in the market. C. the ease of entry and exit into the industry. D. None of the answers is correct.
A central bank can help stop a bank panic by
A) raising the required reserve ratio. B) calling in consumer loans. C) acting as a lender of last resort. D) decreasing income taxes.
Suppose that the price of gasoline doubles overnight. Why is the short-run price elasticity of demand for gasoline different from the long run?