If the demand curve is a vertical line, it means that:
A. regardless of price, the quantity demanded is a constant amount.
B. regardless of quantity, the price is a constant amount.
C. the good is inferior.
D. the good has many substitutes.
Answer: A
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A special license is required to operate a taxi in many cities. The number of licenses is restricted. More drivers want licenses than are issued. This describes a non-perfectly competitive market because
A) taxi services are very different. B) firms cannot freely enter and exit the market. C) transaction costs are high. D) the government generates revenue from the licenses.
The phase in the business cycle in which real GDP declines is called a:
a. trendline. b. peak. c. recession. d. recovery. e. trough.
Economic analysis suggests that gains from specialization and exchange
a. will not be realized unless a central planning authority requires that all goods be produced by the low opportunity cost supplier. b. will be realized if individuals are allowed to pursue goals that are in their own self-interest. c. will not be realized unless business firms employ economists when making decisions about the proper combination of resources to utilize in the production process. d. will be realized if individuals place the public interest above the pursuit of their own self-interest.
A firm that has little ability to influence market prices operates in a
a. competitive market. b. strategic market. c. thin market. d. power market.