When economies of scale are present, but are not sufficiently large to generate a natural monopoly, the expected market structure is:
A. monopoly.
B. monopolistic competition.
C. perfect competition.
D. oligopoly.
Answer: D
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Refer to Table 10-5, which lists the values of Harry Taber's marginal utility and marginal utility per dollar for Italian submarine (sub) sandwiches and tacos. Assume that the price of a sub sandwich is $4 and the price of a taco is $2
When Harry's income is $14, he buys two Italian sub sandwiches and three tacos. The last column lists the values of the marginal utility per dollar for tacos when the price of a taco decreases to $1. Complete this statement: As a result of the change in price A) Harry's purchasing power has increased. He will reduce his consumption of tacos so he can buy one more sub. This is an example of the substitution effect of a price change. B) Harry's purchasing power has increased. Harry buys fewer tacos. This is an example of the substitution effect of a price change C) Harry's purchasing power has increased. If tacos are a normal good for Harry he will buy fewer tacos. This is an example of the income effect of a price change. D) Harry's purchasing power has increased. If tacos are a normal good for Harry he will buy more tacos. This is an example of the income effect of a price change.
A weakness of the market system of resource allocation is that
a. such economies tend to be stagnant b. most participants in such an economy have low standards of living c. there are no limits on an individual's freedom of action d. it does not address the problem of initial inequities in endowments e. its participants are free to act according to their desires
Most less-developed countries have sufficient infrastructure in place to become a developed country
Indicate whether the statement is true or false
Exhibit 15-4 Balance sheet of Tucker National Bank Assets Liabilities Required reserves$ 4,000 Checkable deposits$20,000 Excess reserves16,000 Loans 0 Total$20,000 Total$20,000 Suppose Connie Rich deposits $500 in the bank in Exhibit 15-4. The result would be that the bank must increase its required reserves to:
A. $4,100. B. $4,500. C. $5,100. D. $5,500.