The monopolistically competitive firm differs from monopoly in that its
A. demand curve is flatter.
B. demand curve slopes downward.
C. MR curve lies below its demand curve.
D. profit is maximized where MR = MC.
Answer: A
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If the U.S. government can run chronic budget deficits, why can't state governments do the same?
A) Conservatives have more power in state legislatures than in the U.S. Congress. B) Voters do not believe in budget deficits and they control state governments. C) Most states have no income tax. D) State constitutions require balanced budgets. E) States must rely on taxation for the funds to repay creditors.
An example of a price floor is
a. the regulation of gasoline prices in the U.S. in the 1970s. b. rent control. c. the minimum wage. d. any restriction on price that leads to a shortage.
Most economists agree that
A. active policymaking is unlikely to exert sizable long-run effects on real Gross Domestic Product (GDP). B. passive policymaking is likely to exert sizable long-run effects on real Gross Domestic Product (GDP). C. active policymaking is likely to exert sizable long-run effects on real Gross Domestic Product (GDP). D. none of these
A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. What best describes the facts behind the headline?
A. A shift in supply has equilibrated supply and demand. B. The cigar market is in equilibrium. C. Price is too low, quantity demanded exceeds quantity supplied. D. Price is too low, demand exceeds supply.