One difference between monopolistic competition and pure competition is that:
A. Products may be homogeneous in monopolistic competition
B. There is some control over price in monopolistic competition
C. Monopolistic competition has significant barriers to entry
D. Firms differentiate their products in pure competition
B. There is some control over price in monopolistic competition
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With a price support program, who receives a subsidy?
A) only consumers B) only producers C) the government D) importers E) Both consumers and producers receive a subsidy.
Which of the following statements is correct about the concept of willingness to pay?
A) The willingness to pay is the lowest price that a buyer is willing to pay for an extra unit of a commodity. B) The willingness to pay for a commodity increases exponentially as the consumption of the commodity increases. C) The willingness to pay for a commodity increases linearly as the consumption of the commodity increases. D) If a consumer is consuming 10 units of a commodity and he is ready to pay $2 for the eleventh unit, his willingness to pay for the eleventh unit is $2.
Pick the best answer using the economic way of thinking. If information is a scarce good, then ignorance might be
A) a sin. B) stupid. C) bliss. D) rational. E) inefficient.
The "backward bending" portion of the labor supply curve implies that
A. higher wages lead to fewer hours of work supplied. B. the law of diminishing returns has settled in. C. a minimum wage law is in effect. D. higher wages lead to an increase in hours of work supplied.