In a monopolistically competitive market, how do we model the firm's slight control over the price that they charge?
A. The demand curve is downward sloping and very elastic.
B. The demand curve is downward sloping and very inelastic.
C. The ATC is relatively flat.
D. The AVC is horizontal.
Answer: A
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The rate at which one currency is traded for another is called a(n)
a. prime rate. b. trade rate. c. exchange rate. d. money rate.
A current account surplus in the U.S. balance of payments coincides with a ______.
a. financial account deficit b. financial account surplus c. balance-of-payments deficit on the current account d. negative net balance for the balance-of-payments account
Nepalese villagers sell their kidneys as a way to earn much-needed money. Unfortunately, although the demand for such kidneys in developed economies is high and the medical facilities are available to conduct kidney transplants, the selling and buying of organs is illegal. What idea from Chapter 1 of the text does this situation best illustrate?
A. Marginal revenue should equal marginal cost. B. Social and political forces sometimes rein in market forces. C. Sunk costs do not matter in making decisions. D. Microeconomics and macroeconomics are very much interrelated.