Monopolies can earn positive economic profits in the long run while monopolistically competitive firms cannot due to
A. economies of scale in monopolies but not in monopolistic competition.
B. the less elastic demand faced by monopolies as compared to monopolistically competitive firms.
C. market power of monopolies while monopolistically competitive firms have no market power.
D. barriers to entry in monopoly but not in monopolistic competition.
Answer: D
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When an investor buys a corporate bond
A) the face value of the bond is equal to what the investor paid for the bond. B) the investor becomes part owner of the corporation. C) the principal of the bond is a loan to the corporation. D) the interest made on the bond represents the bondholder's limited liability in the company.
What happened to consumer prices as measured by the CPI between 1929 and 1933?
A) rose by more than 20% B) didn't change C) declined by about 25% D) declined by about 80%
The circular flow model of the economy shows
a. the flow of money, goods, and services between households and firms b. why specific flows occur c. the relationship between money and goods within households d. the relationship between resources and the prices of resources e. the flow of resources from households to firms
The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a:
a. rightward shift of the aggregate demand curve. b. leftward shift of the aggregate demand curve. c. rightward shift of the aggregate supply curve. d. leftward shift of the aggregate supply curve.