In long-run equilibrium, a firm in monopolistic competition makes
A) an economic profit, but the economic profit is less than it would be if the firm was a monopoly.
B) an economic profit that is higher than what it would be if the firm was a monopoly.
C) zero economic profit.
D) an economic profit that is the same amount as it would be if the firm was a monopoly.
E) an economic profit, an economic loss, or zero economic profit.
C
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Absolute advantage is determined by
A) actual differences in labor productivity between countries. B) relative differences in labor productivity between countries. C) Both A and B. D) Neither A nor B.
The last time a recession hit the country of Valtonia, the price of real estate fell significantly. When Craig learns that this country's stock market has crashed, he immediately decides to sell his houses. This is an example of the theory of _____
a. absolute advantage b. rational expectations c. adaptive expectations d. sticky wages
Which of the following tax structures is potentially consistent with the concept of vertical equity?
a. A proportional tax b. A progressive tax c. A regressive tax d. Any of these tax structures are potentially consistent with vertical equity
Tax incentives that encourage saving, investment, and work will shift the AS curve to the right.
Answer the following statement true (T) or false (F)