The legal system in the United States tends
A) to support monopolies.
B) to actively discourage unionization.
C) to discourage the entry of new firms into industries.
D) to promote competition.
Answer: D
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In a perfectly competitive market, the market supply curve is the sum of the
A) supply curves of all the individual firms. B) average variable cost curves of all the individual firms. C) average total cost curves of all the individual firms. D) average fixed cost curves of all the individual firms.
Refer to Table 4-3. The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the market price of cowboy hats is $50, producer surplus is
A) $0. B) $4. C) $62. D) $138.
Since the 1950s
A) U.S. business cycle fluctuations have become milder. B) U.S. business cycle fluctuations have not changed. C) U.S. business cycle fluctuations have becomes more volatile. D) the United States has not experienced a business cycle.
When purchasing autos and other durable goods, consumers tend to use discount rates that are inversely proportional to their income, so the discount rates are lower for consumers with higher income. The key reason for this behavior is that:
A) lower income consumers face very strict cash constraints, and they expect these problems to get worse in the future. B) high income consumers tend to have lower opportunity costs for money. C) high income consumers tend to make long-term investments (e.g., 30-year bonds), which always pay lower interest rates than short-term investments. D) none of the above