A. households do not have perfect information
B. firms are not price takers in input markets
C. firms are not price takers in the output market
D. all of the above
Related Mcqs:
- Suppose that 40 percent of the voting population wish to spent Rs1,000 for artwork in City Hall, 25 percent wish to spent Rs20,000 and 35 percent wish to spend Rs 22,000 What is the median preferred outcome, the average preferred outcome and the modal preferred outcome ?
A. Rs20,000; Rs20,000; Rs22,000
B. Rs1,000; Rs14,333; Rs1,000
C. Rs20,000; Rs13,100; Rs1,000
D. Rs1,000; Rs20,000; Rs22,000 - Which of the following is true under pairwise majority rule if people vote for the outcome closest to their most preferred outcome ?
A. The average preferred outcome wins
B. There is no clear winner due to Arrow’s Impossibility Theorem.
C. The outcome preferred by the median voter wins
D. The outcome preferred by the greatest number of voters wins. - Markets fail to produce an efficient allocation of resources, but government also fail because ?
A. elected officials will act selflessly for the good of society and ignore their own self interest
B. the managers of government agencies are trying to maximize the profit of their agency and they ignore the implications that this has on other departments
C. the optimal level of public goods may be too expensive for the society to produce
D. the measurement of social damages and benefits is difficult and imprecise - The whole class of goods that will be under produced or not produced at all in a completely unregulated market economy are referred to as ?
A. Pareto goods
B. public goods
C. private goods
D. free goods - When excess demand occurs in an unregulated market, there is a tendency for ?
A. price to fall
B. quantity supplied to decrease.
C. price to rise
D. quantity demanded to increase - Exchange rates that are determined by the unregulated forces of supply and demand are ?
A. floating exchange rates
B. pegged exchange rates
C. managed exchange rates
D. fixed exchange rates - A firm that breaks even after all economic costs are paid is earning ?
A. Economic profit
B. Accounting profit
C. Normal profit
D. Supernormal profit - If the efficient markets hypothesis is true, then ?
A. shares tend to be overvalued
B. the stock market is informationally efficient so share prices should follow a random walk
C. All of these answers
D. fundamental analysis is a valuable tool for increasing one’s returns from investing in shares - To be Productively efficient a firm must produce where ?
A. Marginal costs are maximized
B. Marginal costs are Minimized
C. Average costs are minimized
D. Average costs are maximized - To be allocatively efficient a firm must produce where ?
A. The total cost equals demand
B. The average revenue equals the marginal revenue
C. The price equals the average cost
D. The price equals the marginal cost
