The demand curve for a monopolistic competitor slopes downward because
A. demand drops to zero after a slight price increase.
B. there are close but not perfect substitutes for the product.
C. customers have no loyalty to the product.
D. the product is undifferentiated.
Answer: B
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Use the figure below to answer the following question.
If actual production and consumption occur at Q1 and the price is P2
A. deadweight loss equals area f. B. producer surplus equals area c. C. producer surplus equals area c + b. D. consumer surplus equals area a + b.
In what ways can income redistribution be viewed as a public good?
What will be an ideal response?
A competitive firm has been selling its output for $10 per unit and has been maximizing its profit. Then, the price rises to $14, and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price. Once the firm has adjusted, its
a. marginal revenue is lower than it was previously. b. marginal cost is lower than it was previously. c. quantity of output is higher than it was previously. d. All of the above are correct.
The natural rate of unemployment is the rate of unemployment that
A. is an unrealistic goal set by policymakers. B. occurs when employers find more than one job applicant for each job available. C. all workers and employers have fully adjusted to any changes in the economy. D. occurs when all workers find work in the economy.