In perfectly competitive markets, firms operate where MC = MR and because of this, they are not making any economic profit.
Answer the following statement true (T) or false (F)
False
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What can be expected to happen in a country that enacts trade barriers?
A) The rate of population growth will decrease. B) The rate of economic growth will decrease. C) The rate of immigration will increase. D) The rate of technological innovation will increase.
If the Fed sells U.S. government securities to banks, the federal funds rate ________ and banks' reserves ________
A) falls; increase B) rises; increase C) falls; decrease D) rises; do not change E) rises; decrease
In October 2008, Congress passed the Troubled Asset Relief Program (TARP), under which the Treasury provided ________ to banks in exchange for ________
A) financial advice; promises to expand mortgage lending B) funds; stock C) bonds; cash D) lines of credit; loan guarantees
How does Ebay differ from an economist's view of a perfect competitive market?
a. Ebay has few buyers whereas perfect competitive industry assumes many buyers b. Ebay has few sellers whereas perfect competitive industry assumes many sellers c. There is limited information in ebay whereas perfect competitive industry assumes full information for both buyers and sellers d. There is no difference between these two markets.