When firms in monopolistic competition are making an economic profit, firms will
A) enter the industry, and demand will increase for the original firms.
B) exit the industry, and demand will increase for the firms that remain.
C) exit the industry, and demand will decrease for the firms that remain.
D) enter the industry, and demand will decrease for the original firms.
D
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Which of the following statements concerning the supply of labor is true?
a. The wage rate has no effect on the supply of labor. b. The labor supply curve is downward sloping. c. The supply of labor is determined by the prevailing wage rate. d. The typical labor supply curve is upward sloping.
When the Fed lowers the required reserve ratio, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. c. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public. d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public. e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
Other things the same, if there is an increase in the money supply growth rate that is larger than expected, then in the short run
a. the natural rate of unemployment rises. b. the natural rate of unemployment falls. c. the unemployment rate will be above its natural rate. d. the unemployment rate will be below its natural rate.
In the short run, at least one factor of production is fixed. This implies that beyond some level of output a firm will:
A. "learn by doing." B. experience diminishing marginal returns. C. experience increasing marginal returns. D. have a U-shaped long-run average cost curve.