If we were to compare the monopolistically competitive firm's long-run outcome to that of a perfectly competitive one, we would conclude that the monopolistically competitive firm:
A. creates less consumer surplus.
B. produces more output.
C. earns the same profit as a perfectly competitive firm.
D. All of these statements are true.
A. creates less consumer surplus.
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For a normal good, such as steak,
a. quantity demanded increases as its price falls. b. the income and substitution effects work in opposite directions c. the income effect is negative d. the income effect reinforces the substitution effect e. the supply curve is vertical
Which of the following is concerned with the distribution part of resource allocation?
a. An economy decides to produce equal quantities wheat, rice, and clothes. b. An economy decides to use 25% of the available capital for producing clothes. c. An economy decides to ration 40% of its output to low income groups. d. An economy decides to use more labor for producing wheat and rice.
If the Luddites had succeeded in ________ the introduction of labor-saving machinery, economic growth in Great Britain may have been ________.
A. blocking; slower B. blocking; more rapid C. promoting; more rapid D. promoting; slower
The price of gasoline is $3.30 per gallon. If one gallon of gasoline provides the same marginal utility as a gallon of milk, how much will the gallon of milk cost at consumer equilibrium?
a. $1.00 b. $1.65 c. $3.30 d. $6.60