When new firms enter a monopolistically competitive industry, ceteris paribus, the
A. Market price increases.
B. Market price decreases.
C. Market price remains unchanged.
D. Change in market price cannot be determined based on the information given.
Answer: B
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If orange juice prices fall by 25 percent next year, there will be a
A. rightward shift in the demand for pineapple juice. B. rightward shift in the supply of pineapple juice. C. leftward shift in the supply of pineapple juice. D. leftward shift in the demand for pineapple juice.
Which of the following items are counted in M2?
a. stock mutual funds b. money-market mutual funds c. bond mutual funds d. all of the above
Suppose you use your debit card to buy soda from a soda machine. Which of the following is true regarding the transaction?
A) The debit card is not money; it's only an instruction to make a loan. B) The debit card is money; your use reflects the exchange of a good. C) The debit card is not money; its use is only a tool to cause money to move from your account. D) Your use makes the debit card money, as funds are transferred between your account and the machine owner. E) Using the debit card is like using a check and is, therefore, money.
The trade model described in the text demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage
In reality we do not see complete specialization in production. State three reasons why this is case.