Which of the following is not a condition for perfect competition?
A. Firms have perfect information.
B. Firms take prices as given.
C. Firms are protected by barriers to entry.
D. Firms sell a standardized product.
Answer: C
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An individual who is a risk lover
a. values a lottery at more than its expected value b. values a lottery at exactly its expected value c. values a lottery at less than its expected value d. tends to play lots of lotteries
If the current market federal funds rate is in the target rate range and the demand for reserves decreases, the likely response in the federal funds market will be:
A. the market federal funds rate will decrease. B. the market federal funds rate will increase. C. the market federal funds rate will equal the target rate. D. nothing; the reserve supply is so high that the market federal funds rate will be unchanged.
Consider the economy described by the income distribution in Table 21-1. From this table, we can conclude that the poorest 60 percent of the population earns
A. 15 percent of the income. B. 17 percent of the income. C. 32 percent of the income. D. 68 percent of the income.
If scarcity was eliminated
A. trade would become unnecessary. B. the concept of trade-offs would become irrelevant. C. opportunity costs would increase. D. all nations would have an absolute advantage in producing all products.