When Alfred Marshall, the celebrated 19th-century economist, used the scissors metaphor to explain how prices are determined, he
a. expressed the view that the sharpness of entrepreneurs keeps prices low
b. expressed the view that the sharpness of competition keeps prices low
c. pointed out that both blades do the cutting just as the interaction of supply and demand determine equilibrium price
d. showed that price and quantity were the equivalents of the scissor's two blades
e. showed that producers and consumers were at the cutting edge of price determination
C
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Suppose the automobile industry can import 10% of the total quantity demanded of cars in the U.S. This is an example of a(n) ________.
A. import tax B. tariff C. quota D. trade limit
The monopolistic competition market structure is characterized by:
A. few firms and similar products. B. many firms and differentiated products. C. many firms and a homogeneous product. D. few firms and a homogeneous product.
Which of the following statements is NOT true about exchanges in the market system?
A. Exchanges occur only in situations of barter where the market price is irrelevant. B. In voluntary exchange both parties are better off because of the exchange. C. Prices indicate what is relatively abundant and what is relatively scarce. D. Transaction costs in exchanges include the cost of enforcing a contract as well as the costs of information.
For normal goods which of the following explains why demand curves slope downward?
A) prices and income B) substitutes and complements C) resources and technology D) substitution effect and income effect