Which of the following conditions distinguishes perfect competition from monopolistic competition?
a. the number of sellers
b. freedom of entry and exit
c. homogeneity of the product
d. none of the above
c
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To explain the existence of excess capacity, Keynes argued that
A) prices and wages are flexible, and eventually markets would go back to equilibrium. B) the long run average cost curve should not occur at the full employment level. C) the aggregate demand curve can be manipulated by advertising. D) prices and wages are inflexible in the downward direction.
According to Keynes, during extreme times like deep recessions, which group is the only one possessing the power and resources to move aggregate demand?
a. Consumers b. Producers c. Government d. Investors
Which of the following statements is NOT true?
A. The United States government ensures that competition flourishes, that information flows freely, and that property rights are protected. B. The price mechanism will work best if there are a enough firms in each industry to ensure that no one firm can influence price. C. Environmental pollution is considered a market failure. D. Everything produced by the public sector is a public good.
A perfectly competitive producer faces a demand curve for its own product that is
A. horizontal. B. upward sloping. C. vertical. D. downward sloping.