In comparing monopolistic competition to perfect competition, one can conclude that the lack of free entry is the key to having the ability to set price
Indicate whether the statement is true or false
False. Free entry is the key to driving long-run profit to zero. The key to price-setting ability is the downward-sloping demand curve. This can, in general, result from having few firms, but is due to product differentiation when considering monopolistic competition.
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Refer to Figure 2-5. If the economy is currently producing at point Y, what is the opportunity cost of moving to point X?
A) 9 million tons of paper B) 5 million tons of paper C) 5 million tons of steel D) 19 million tons of steel
When a producer is operating efficiently it is producing:
A. at a point on its production possibilities frontier. B. at a point on or under its production possibilities frontier. C. only one good. D. the good in which it has an absolute advantage.
The consumer price index (CPI):
a. adjusts for changes in product quality. b. includes separate market baskets of goods and services for both base and current years. c. includes only goods and services bought by typical urban consumer. d. uses current year quantities of goods and services.
Think birth rate and growth in GDP per capita. A major reason that China adopted a one- child-per-family policy was that
a. it had to comply with United Nations standards to qualify for economic aid b. its per capita income would increase if the population growth moderated c. people were migrating to urban centers and there was insufficient housing for them d. resources could be diverted to military: a simple case of guns and butter e. it chose the big-push development strategy, which includes family planning