The model of perfect competition is valuable for
A) prediction.
B) comparison to other markets.
C) Either A or B.
D) None of the above.
C
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If the nominal rate of interest on a bond was 7 percent, the inflation rate was 6 percent and an individual was in a 50-percent tax bracket, the after-tax real return on the bond would be equal to
a. 0 percent. b. .5 percent. c. 6 percent. d. 7 percent. e. none of the above.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Which of the following results from having scarce economic resources?
a. The production of unlimited goods and services b. The production of limited goods and services c. Deflation d. Poverty and unequal distribution of wealth
Figure 12.8 depicts an advertising game between two stores. Which of the following possible outcomes is a Nash equilibrium of the game?
A. Neither store advertises. B. Only Store A advertises. C. Only Store B advertises. D. Both Store A and Store B advertise.