Economists study perfect competition
A. because many markets are perfectly competitive.
B. for its descriptive realism.
C. to establish a benchmark by which to measure the performance of the economy.
D. All of the responses are correct.
Answer: C
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Answer the next question based on the following data. All figures are in billions of dollars.Government purchases$15Consumption90Gross investment20Consumption of fixed capital5Exports8Imports12This nation's GDP is ________.
A. $116 B. $125 C. $150 D. $121
Which might be an example of a positive externality?
A) Loud hip-hop music B) A dog gets loose from its master C) A lost wallet filled with twenty-dollar bills D) The rumbling of a Harley Davidson Low Rider motorcycle E) Any of the above, as long as they unintentionally benefit others
Greg and Todd form a partnership and start a business in which each has a 50 percent share of the profit. After a year, the firm goes bankrupt and has debts of $20,000. Greg has no money, but Todd has $25,000 in the bank
Todd must pay ________ of debt. A) $0 because in a partnership each partner must pay the same B) $0 because partners in a partnership have limited liability C) half, or $10,000 D) $20,000
Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?
A) D no change, S decreases, P increases, Q increases. B) D decreases, S no change, P and Q decrease. C) S decreases, D no change, P increases, Q decreases. D) D and S decrease, P and Q increase.