Which of the following is not a characteristic of the structure of perfectly competitive markets?
A. Each individual firm is small in size relative to the overall market.
B. Few sellers.
C. Homogeneous product.
D. Easy, low cost entry and exit.
Answer: B
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The shortage created by a price ceiling will likely be
A) smaller if the good is a necessity. B) larger if the good is addictive. C) smaller if the good is a luxury. D) unaffected by the time that has elapsed since the price ceiling is implemented. E) None of the above answers is correct.
List and discuss three problems that might arise when using the Coase theorem.
What will be an ideal response?
Time inconsistency refers to a situation where:
A. we typically choose the same thing, regardless of when the decision is being made. B. we change our minds about what we want simply because of the timing of the decision. C. we change our minds about what we want in response to gaining complete information. D. None of these statements is true.
A COLA is
A. An automatic adjustment of nominal income to the rate of inflation. B. An inflation rate of at least 200 percent, lasting more than one year. C. A price index that refers to all goods and services included in GDP. D. A mortgage that adjusts the nominal interest rate to changing rates of inflation.