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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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
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
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.