Market power may result from
A. Antitrust policy.
B. Flawed price signals.
C. Control of resources.
D. Merit goods.
Answer: C
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One assumption of the perfectly competitive model is free entry and exit. This assumption most directly leads to the implication that:
A. firms will compete on the basis of better service rather than lower prices. B. positive economic profit is only possible in the short run. C. firms will have to spend money on advertising. D. a long-run equilibrium cannot be achieved.
When does the burden of a tax imposed on a good fall more heavily on consumers?
What will be an ideal response?
A bank has excess reserves of $1,000 and demand deposit liabilities of $80,000 when the reserve requirement is 25 percent. If the reserve requirement is lowered to 20 percent, the bank's excess reserves will be
A) $1,000. B) $5,000. C) $8,000. D) $9,000.
If the stock market falls by 25 percent next year and remains down, what is most likely to happen to the consumption function?
a. It will shift upward. b. It will shift downward. c. It will not shift, but people will move downward along the consumption function. d. It will not shift, but people will move upward along the consumption function.