Which of the following may be used in an attempt to correct market failure?
A. Government failure.
B. Laissez faire price policies.
C. Laws and regulations.
D. The market mechanism.
Answer: C
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Which of the following is NOT a basic characteristic of perfect competition?
A. considerable non-price competition B. no barriers to the entry or exit of firms C. a standardized or identical product D. a large number of buyers and sellers
Refer to the above figure for the corn market. The government wants to set an effective price support in the corn market. To be effective the price should be set
A) below P1. B) at P1. C) at P2. D) at P3.
Stagflation
A) is highly unlikely if the Phillips curve is downward sloping. B) implies that a tradeoff between inflation and unemployment may not always exist. C) is the simultaneous occurrence of high rates of inflation and unemployment. D) b and c E) a, b, and c
What are the three basic characteristics of monopolistic competition?
a. homogeneous product; few sellers; free entry b. product differentiation; many sellers; free entry c. product differentiation; few sellers; difficult entry d. homogeneous product; few sellers; difficult entry