Product differentiation in monopolistically competitive markets implies that:
a. firms make economic profits in the long run
b. firms will produce at the minimum of the average total cost curve in the long run.
c. individual firms face downward-sloping demand curves.
d. firms are certain to earn economic profits in the short run.
c
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Refer to Figure 15-7. Suppose the Fed lowers its target for the federal funds rate. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to A. B) A to B. C) C to D. D) E to A. E) C to B.
A firm will not hire additional workers once
A) it earns accounting profits. B) the additional cost of a worker equals the additional revenue from the worker. C) total product is rising. D) the company reaches its breakeven output level.
The tradeoffs faced by a society can be illustrated in a graph known as the:
a. production operations curve. b. production cost curve. c. production cost model. d. production cost forecast curve. e. production possibilities curve.
Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X, ceteris paribus.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis Table 1.3, what is gained by producing at point M rather than point N?
A. 21 combs. B. 1 comb. C. 2 combs. D. 23 combs.