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Homework answers / question archive / True/False 1) An oligopoly is a market that is characterized by the independence of firms
True/False
1) An oligopoly is a market that is characterized by the independence of firms.
2) Utility in economics means usefulness or pleasure.
3) The marginal utility of a good or service is the addition to total utility that an individual receives from consuming one more unit of that good or service.
4) Information asymmetries means that you know as much about your life circumstances as an outside agency such as an insurance company.
5) The perfect competition market structure is characterized by considerable non-price competition.
6) If an activity generates external costs, the decision makers generating the activity will be faced with its full costs.
7) The difference between the maximum price that consumers are willing to pay for a good and the market price that they actually pay for a good is referred to as the supplier surplus
8) Even if you?re living in a home you?ve already paid off you still have an opportunity cost.
9) Goods and services for which the income elasticity of demand is likely to be negative include housing, seafood, rock concerts, and medical services.
10) Because a perfectly competitive firm equates price and fixed cost, it efficiently allocates resources.
1. False (It is a market characterized by the number of firms in the market)
2. True
3. True
4. False (Information asymmetry means one economic agent withholds the total information from the other)
5. False ( It is characterized by price competition)
6. False ( External costs are faced by a third party)
7. False (It is referred to as the consumer surplus)
8. True (It is the cost of renting the house)
9. False (All the mentioned goods are normal goods, they have a positive income elasticity of demand. A negative income elasticity means that the goods are inferior goods)
10. True
