Why does a perfectly competitive market require many participants as both buyers and sellers?
(A) So that both buyer and seller have the same information.
(B) In order to maintain quality over the goods.
(C) So that no individual can control the price.
(D) Because the merchandise must be uniform.
Ans: (C) So that no individual can control the price.
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A construction boom occurs and many of the new buildings need plywood for their framing. Which of the figures above best illustrates this change?
A) Figure A B) Figure B C) Figure C D) Figure D E) Figure A or Figure C
In a graph that illustrates a perfectly competitive firm, marginal revenue is
A) a diagonal line that lies below the firm's demand curve. B) a line that intersects the firm's demand curve from below at its lowest point. C) the same as the firm's demand curve. D) a line that intersects the firm's average total cost curve from below at its lowest point.
Chile is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Chile imposes a $7 tariff on chips. Which of the following outcomes is possible?
a. The price of chips in Chile increases to $19; the quantity of Chilean-produced chips decreases; and the quantity of chips imported by Chile decreases. b. The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases. c. The price of chips in Chile increases to $19; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases. d. The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile does not change.
Given the limits of international cartel power, one alternative for a developing country to put upward pressures on the world prices of its primary product exports is to
A. tax its primary-product exports. B. impose tariffs on primary-product imports. C. subsidize its manufacturing imports. D. subsidize its primary product exports.