Discuss the characteristics of a perfect competitive industry and which real-life industries come closest to this type of market structure.
What will be an ideal response?
The companies in a perfectly competitive industry are price takers, which means they have no control over their own price, but must accept the equilibrium price. Also there are many sellers and buyers in a perfectly competitive market, easy entry of new firms, and homogeneous products. Agricultural markets, such as the soybean or wheat markets, approach this description. There are thousands of sellers, and supply and demand in the market set the price.
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When a strategy is the best one to follow no matter what strategy other players choose, it is called a:
A. golden decision. B. dominated strategy. C. dominant strategy. D. zero-sum strategy.
The quantity demanded of an input normally rises as its price rises.
Answer the following statement true (T) or false (F)
A country with a civilian population of 120,000 (all over age 16) has 100,000 employed and 10,000 unemployed persons, of which 5,000 are frictionally unemployed and another 3,000 structurally unemployed
a. What is the size of the labor force? b. What is the actual unemployment rate? c. What is the labor force participation rate? d. What is the employment/population ratio? e. What is the natural rate of unemployment? f. Is this economy in a recession or a boom? Explain.
An advantage of a corporation is
A. the fact that ownership and control are never separated. B. the ability to raise large sums of financial capital. C. the fact that the corporation is dissolved when one of its owners dies. D. unlimited liability on the part of shareholders.