In the long run, monopolistically competitive firms are ________ to perfectly competitive firms because ________
A) similar; both firms produce at the minimum ATC
B) similar; both firms make zero economic profit
C) not similar; monopolistically competitive firms set P = MC to maximize profits
D) not similar; monopolistically competitive firms can make an economic profit and perfectly competitive firms cannot
B
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Refer to Figure 24-1. Ceteris paribus, a decrease in interest rates would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Liquidity can be defined as the
A. cash value of money. B. value of money adjusted for inflation. C. value of fiat money when used for spending. D. ease with which an asset can be converted to a spendable asset.
If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?
a. Price would increase, and quantity would decrease. b. Price would decrease, and quantity would decrease. c. Price would increase, and quantity would increase. d. Price would decrease, and quantity would increase.
During recessions, income
a. and unemployment both rise. b. rises and unemployment falls. c. falls and unemployment rises. d. and unemployment both fall.