Real-world markets:
A. ensure that sellers will always be honest and provide accurate information because those who are dishonest or provide inaccurate information go out of business.
B. can operate efficiently only if government takes steps to correct informational problems.
C. provide no mechanism for solving informational problems.
D. often involve deception, cheating, and inaccurate information.
Answer: D
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In the dominant firm model as evidenced by the production of iPods by Apple, the entrance of the competitive fringe firms has what effect on the dominant firm?
A) Its price is lower, but it produces more output. B) Its price is lower, and it produces less output. C) Its price is the same, but it produces less output. D) Its price is higher, but it produces more output.
If Firm A and Firm B are playing a finitely repeated game and both know when the final period is, cooperation ________ possible due to the ________.
A) is; trigger strategy B) is not; trigger strategy C) is; end-period problem D) is not; end-period problem
Suppose that the economy is in a position of short-run equilibrium at a point where real GDP is below the full-employment level. Assuming no further change in aggregate demand and self-correction, the movement to a new long-run equilibrium includes a decrease in which of the following? a. The unemployment rate
b. The price level (CPI). c. The level of nominal wages and salaries. d. All of the above.
By comparing marginal revenue and marginal cost, a firm in a competitive market is able to adjust production to the level that achieves its objective, which we assume to be
a. maximizing total revenue. b. maximizing profit. c. minimizing variable cost. d. minimizing average total cost.