How could Adam Smith's comment about the butcher, the brewer, and the baker be accurately rephrased in modern terms?
A) The butcher, the brewer, and the baker give us our dinner because they want to be well liked in the community.
B) The butcher, the brewer, and the baker give us our dinner because they will be sued if they don't do so.
C) The butcher, the brewer, and the baker give us our dinner because they each earn a living by doing so.
D) The butcher, the brewer, and the baker give us our dinner because they view doing so as a public service.
Answer: C
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Regulation
A) always increases consumer surplus. B) passes the cost-benefit test. C) solves market failures of all size. D) None of the above.
All of the following characteristics are common to both monopolistic competition and perfect competition except
A) firms act to maximize profit. B) entry barriers into the industries are low. C) the market demand curves are downward-sloping. D) firms take market prices as given.