If Marginal Cost (MC) is higher than Average Cost (AC), average cost is
a. falling
b. rising
c. constant
d. none of the above
b
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In a monopolistically competitive market with Dixit-Stiglitz preferences, the number of firms in the differentiated product market falls as goods in that market become less substitutable.
Answer the following statement true (T) or false (F)
In situations where businesses discriminate in response to the preferences of consumers, discrimination:
A. is consistent with efficient markets. B. will be eliminated by the market. C. will not persist even though it's what the customers want. D. is not consistent with efficient markets.
Monetary neutrality means that a change in the money supply
a. does not change real variables. Most economists think this is a good description of the economy in the short run and in the long run. b. does not change real variables. Most economists think this is a good description of the economy in the long run but not the short run. c. does not change nominal variables. Most economists think this is a good description of the economy in the short-run and the long run. d. does not change nominal variables. Most economists think this is a good description of the economy in the long run but not the short run.
Demand for Shell gasoline will increase if the price of:
A. Shell gasoline decreases. B. Motor vehicles increases. C. BP gasoline increases. D. BP gasoline decreases.