The basic idea of the theory of contestable markets is that when the cost of entry and exit is very low, the threat of entry can be sufficient to produce an allocation similar to the one we see under
A. monopolistic competition.
B. oligopoly.
C. perfect competition.
D. monopoly.
Answer: C
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Joe's income is $500, the price of food (F, y-axis) is $2 per unit, and the price of shelter (S, x-axis) is $100. Which of the following represents his marginal rate of transformation of food for shelter?
A) -5 B) -50 C) -.02 D) None of the above.
We can safely say that total output can decrease if there is a(n)
A. decrease in the number of workers per machine. B. increase in the size of the labor force and an increase in the productivity of workers. C. increase in the size of capital and an increase in the productivity of machines. D. increase in the number of machines per worker.
With respect to the classical labor market analysis, it is not assumed that
a. firms have complete information with respect to relevant prices. b. workers negotiate for unique wages individually. c. money wages adjust with a short lag. d. All of the above e. None of the above
If there is a surplus in the market for loanable funds, the resulting change in the real interest rate
a. reduces both the quantity of loanable funds supplied and the quantity of loanable funds demanded. b. reduces the quantity of loanable funds supplied and raises the quantity of loanable funds demanded c. raises both the quantity of loanable funds supplied and the quantity of loanable funds demanded. d. raises the quantity of loanable funds supplied and reduces the quantity of loanable funds demanded.