What characterizes a competitive equilibrium?
A) Markets are rationed.
B) Governments stay out of the market.
C) Economic agents are price-takers.
D) It is costly to experiment with policies.
C
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Suppose the cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A. drink a third glass of soda. B. drink a third glass of soda if the benefit of doing so is positive. C. not drink a third glass of soda. D. drink a third glass of soda if his benefit from drinking his second glass of soda was positive.
A surplus means a(n):
a. excess demand for this product. b. situation where the current market price is too low. c. situation where the quantity demanded exceeds the quantity supplied. d. situation where the quantity supplied is less than the quantity demanded. e. excess supply of the product at the current price.
Good that cost one half dollar in the U.S. cost one euro in Germany, the real exchange rate would be computed as how many German goods per U.S. goods?
a. one half b. one half the price of the U.S. goods c. one half the number of euros it takes to buy a U.S. dollar d. None of the above is correct.
If a country’s GDP DECREASES, but its debt INCREASES during that year, then the country’s debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.
A. decrease because GDP decreased B. decrease C. increase or decrease D. increase