As a result of specialization and trade, individuals no longer have to make choices about how to spend their incomes.
Answer the following statement true (T) or false (F)
False
Because of scarcity, market consumers will always have to make choices.
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The number of firms in a monopolistically competitive market means that
A) all firms will have substantial monopoly power since there are so few firms in the industry. B) each firm has a relatively small share of the total market since there are many firms in the industry. C) the firms will be likely to collude since there are only a few firms in the industry. D) firms will have a hard time earning non-negative profits since there are many firms in the industry.
Assume that the production technology required to produce goods X and Y is very similar. If a firm that is producing good X notices that the market price of good Y is rising, it will:
A. intensify its production of good X. B. shift into producing good Y. C. charge a higher price for good X. D. anticipate a price increase for good X.
How will a cut in a fixed tax affect the consumption schedule?
A. It will shift downward. B. It will shift upward. C. It will become flatter. D. It will become steeper.
The analysis of how asymmetric information problems affect economic behavior is called ________ theory
A) uneven B) parallel C) principal D) agency