All of the following are characteristics of a perfectly competitive market EXCEPT
A. buyers and seller have equal access to information.
B. high barriers to entry and exit.
C. large number of buyers and sellers.
D. homogeneous products.
Answer: B
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Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00. This year your cafeteria job pays $9.90 per hour and download costs $1.10. You are clearly
A. worse off because of inflation. B. worse off because the download is now relatively more expensive. C. better off because your wage rate went up. D. better off because the download now costs less work.
The increase in wage inequality resulting from globalization can be reversed through:
A. making markets more competitive. B. revoking the principle of comparative advantage. C. decreases in worker mobility. D. increases in worker mobility.
Government's use of eminent domain is a solution to
A) the problem of negative externalities. B) potential monopolization of a market. C) the holdout problem. D) the free-rider problem.
Which of the following statements about the balance of payments accounts is CORRECT?
A) The current account must be greater than the capital and financial account. B) The sum of all three accounts is always zero. C) The official settlements account is typically larger than both the capital and financial account and the current account. D) Typically the capital and financial account is near zero because it equals the difference between the current account and the official settlements account.