Economics - Study Mode
[#901] When a market is in equilibrium
Correct Answer
(D) All of the above are correct
Explanation
Solution: When a market is in equilibrium No shortage exists, Quantity demanded equals quantity supplied and A price is established that clears the market.
[#902] A market structure in which many firms sell products that are similar but not identical is known as
Correct Answer
(A) Monopolistic competition
Explanation
Solution: A market structure in which many firms sell products that are similar but not identical is known as Monopolistic competition. Monopolistic competition characterizes an industry in which many firms offer products or services that are similar, but not perfect substitutes. Barriers to entry and exit in a monopolistic competitive industry are low, and the decisions of any one firm do not directly affect those of its competitors.
[#903] Economics is the study of
Correct Answer
(C) how society manages its scarce resources
Explanation
Solution: Economics is the study of how society manages its scarce resources. Resources are scarce in that we have fewer resources than we wish. Economists study how people make decisions about buying and selling, and saving and investing.
[#904] If there are implicit costs of production
Correct Answer
(B) Economic profit will be less than accounting profit
Explanation
Solution: If there are implicit costs of production Economic profit will be less than accounting profit. Economic profit is total revenue minus opportunity cost. Accounting profit is total revenue minus explicit cost. Opportunity costs are higher than explicit costs because opportunity costs also include implicit costs.
[#905] Which among the following is not a property of indifference curves?
Correct Answer
(C) Indifference curves are, always concave to the origin