When comparing perfect competition and monopoly, a major assumption made is that
A) the monopolist faces a downward sloping demand curve.
B) consumers only care about the price of the good and not whether the seller is a monopoly or not.
C) the costs of production are the same under monopoly as under perfect competition.
D) the monopolist can make an above normal rate of return.
Answer: C
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If there is no one who is interested in borrowing from a bank,
a. the bank's excess reserves will be zero b. there will be no process of money creation c. the full money multiplier potential will be reached d. the legal reserve requirement must be equal to zero e. the legal reserve requirement must be equal to 100 percent
A $100 increase in both government expenditure and taxes will
a. cancel each other out so that the equilibrium level of output will remain unchanged b. lead to a $100 decrease in the equilibrium level of output c. lead to a $100 increase in the equilibrium level of output d. lead to a greater than $100 increase in the equilibrium level of output e. lead to a less than $100 increase in the equilibrium level of output
The fewer the number of firms present in a market, the:
A. more likely market power will exist. B. less like a monopoly it will behave. C. less likely barriers to entry are present. D. more competition is likely to be present.
If the government simultaneously increases marginal income tax rates and unemployment compensation, the:
A. incentive to work will increase. B. incentive to work will diminish. C. effect on the incentive to work cannot be predicted. D. incentive to work will not change.