Competition in a market system denotes a condition where:
A. The diffusion of economic power limits its potential abuse
B. Any given product can be purchased at a wide range of prices
C. Contractual agreements among individual firms are restricted and avoided
D. A few large sellers are constantly jostling for market share
Answer: A
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If U.S. consumers increase their spending on hybrid cars by 60 percent, and 60 percent more hybrid cars are produced, this is known as the
A) majority rule. B) proportional rule. C) government rule. D) profit rule.
Which of the following is considered a microeconomic issue?
A. Chinese economic growth has declined. B. The Federal Reserve cuts key interest rates in order to stimulate lending. C. Walmart decides to add more self-checkout machines as the cost of labor rises. D. India experiences a reduction in unemployment after opening its borders to trade.
A monopolistically competitive firm is producing at an output level in the short run where average total cost is $4.50, price is $4.00, marginal revenue is $2.50, and marginal cost is $2.50. This firm is operating:
A. at the break-even level of output in the short run. B. at an efficient level of output in the short run. C. with a loss in the short run. D. with a profit in the short run.
If a country allows its currency's value to be determined in the market for foreign exchange, it has a:
A. prime exchange rate. B. key exchange rate. C. fixed exchange rate. D. floating exchange rate.