Suppose That a Factory in a Small City Is the Only

question 106

Multiple Choice

Suppose that a factory in a small city is the only employer for thousands of unskilled workers.The model that best fits this situation is:

• A) monopoly.
• B) bilateral monopoly.
• C) perfect competition.
• D) monopsony.

---

Definitions:

Effective Interest Rate

The real rate of interest earned or paid on an investment, loan, or other financial product, accounting for the effects of compounding.

Bank Discounts

An interest deduction from the face value of a note, payable by the borrower at the time a loan is issued.

Reversing Entry

An accounting method used to reverse the impact of certain journal entries made in the previous accounting period for the sake of simplicity in future record keeping.

Interest Accrued

The accumulated interest on a loan or bond that has not yet been paid to the lender.