Characteristics of a perfectly competitive market include:
A. the absence of transaction costs.
B. differentiated products.
C. few sellers, some with a large market share.
D. All of these are characteristics of a perfectly competitive market.
A. the absence of transaction costs.
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The public policies designed to mitigate the effects of monopolies are:
A. highly debated issues. B. proven to increase benefits more than increase costs. C. highly effective. D. well-defined and accepted.
One cause of the 2008 financial crisis was that many mortgage brokers were ______.
a. warning borrowers not to borrow too much b. discouraging borrowers from using new hybrid loans c. encouraging borrowers to borrow more than they could afford d. promoting fixed-rate mortgages instead of adjustable-rate mortgages
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the short run would be:
A. P4 and Y2. B. P4 and Y1. C. P1 and Y1. D. P3 and Y1.
If there are external costs of production and firms do not have to account for these costs, then the firms will ________ and ________ compared with the efficient values.
A. underproduce; overprice B. overproduce; overprice C. underproduce; underprice D. overproduce; underprice