Recessions and depressions are the principal examples of
A. market failure.
B. coordination failure.
C. central planning.
D. socialist contradictions.
Answer: B
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Figure 4.5 illustrates a set of supply and demand curves for hamburgers. A decrease in supply and an increase in demand are represented by a movement from
A) point d to point c. B) point b to point d. C) point c to point b. D) point c to point a.
When explaining expansions and recessions, the classical model is
a. reliable b. seriously flawed c. the favorite explanatory tool of economists d. overly focused on the labor market e. sometimes accurate and sometimes not
What role do losses play in a competitive price-searcher market?
a. They penalize a firm for producing a differentiated product. b. They signal that more resources are needed in a particular market. c. They show firms that barriers to entry are high. d. They send a message that more value would be created if the resources were used to produce other goods.
Which of the following is NOT a characteristic of a perfectly competitive market?
A. a large number of firms in a market B. selling a standardized product C. substantial barriers to entry D. an individual firm having no control over price