Markets, viewed from the perspective of the supply and demand model:
A. assume many buyers and many sellers of a standardized product.
B. assume market power so that buyers and sellers bargain with one another.
C. do not exist in the real-world economy.
D. are approximated by markets in which a single seller determines price.
Answer: A
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Which oligopoly model results in firms successively undercutting their rivals' prices until the competitive outcome is reached?
a. The contestable market model. b. The Cournot model of oligopoly. c. The Bertrand model of oligopoly. d. The monopolistic competition model.
A demand curve that is horizontal indicates that the commodity
A) has few substitutes. B) must be very cheap. C) has a large number of substitutes. D) is a necessity.
The maximum amount of a good that may be imported during a specified period of time is
A) an infant industry agreement. B) an import quota. C) dumping. D) comparative advantage.
Which of the following is not true? a. Voluntary exchange is expected to be advantageous to both parties to the exchange
b. What one trader gains from a trade, the other must lose. c. If one party to a potential voluntary trade decides it does not advance his interests, he can veto the potential trade. d. The expectation of gain motivates people to engage in trade.