The model of monopolistic competition differs from the model of perfect competition in which of the following assumptions?
A. Perfect information
B. Large number of firms
C. Free entry and exit
D. Product homogeneity
Answer: D
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When the price of an inferior good increases,
a. both the income and substitution effects encourage the consumer to purchase more of the good.
b. both the income and substitution effects encourage the consumer to purchase less of the good.
c. the income effect encourages the consumer to purchase more of the good, and the substitution effect encourages the consumer to purchase less of the good.
d. the income effect encourages the consumer to purchase less of the good, and the substitution effect encourages the consumer to purchase more of the good.
The Joneses have a taxable income of $18,000, all in the form of wages. They have three children, and they take the standard deduction. Which statement is true?
A. The Joneses pay more in Social Security tax than in personal income tax. B. The Joneses pay more in personal income tax than in Social Security tax. C. The Joneses pay about the same amount in Social Security tax and personal income tax. D. It is impossible to determine if the Joneses pay more in Social Security tax than in personal income tax.
The conversion of resources into consumer goods or services is called
A) human capital. B) production. C) opportunity cost. D) consumption.
How does the owner of a sole proprietorship relate to the business?
A) The owner and the business are separate legal entities. B) The owner and the business are not separate legal entities. C) The assets of the owner are considered separate from the assets of the business. D) None of these describe the legal relationship of the owner to the business.