Which of the following is a characteristic of pure monopoly?
A. Close substitute products.
B. Barriers to entry.
C. The absence of market power.
D. "Price taking."
Answer: B
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Suppose the same basket of goods costs $100 in the U.S. and 50 pounds in Britain. According to purchasing power parity, if the two countries' price levels do not change, what will be the exchange rate?
a. 2 dollars/pound b. 4 dollars/pound c. 5 dollars/pound d. 0.50 dollars/pound e. 50 dollars/pound
Game theory is
A. the study of how people behave in strategic situations. B. the collusion of a few powerful firms to create monopoly power. C. the act of price-fixing to share markets. D. the division of a market into non-competitive areas, creating regional monopolies.
According to the textbook, the income elasticity of demand is:
A about the same in the short run and in the long run. B much smaller in the short run than in the long run. C much larger in the short run than in the long run. D is difficult to differentiate from the short run to the long run.
Which of the following events would cause the supply curve to decrease from S1 to S2?
A. lower expected future prices B. an increase in the price of inputs C. an increase in the number of firms in the market D. a decrease in the price of inputs