In the long run, a monopolistically competitive firm will set price:
a. at the intersection of the marginal cost and demand curves.
b. at the intersection of the average total cost and demand curves.
c. higher than the competitive level, but lower than the monopoly price.
d. higher than the marginal cost, but lower than average total cost.
c
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For consumers with a binding borrowing constraint, a decrease in the real interest rate ________
A) decreases consumption now, and in the future B) increases consumption now, and in the future C) decreases consumption now, and increases future consumption D) has no impact on consumption
To be able to engage in profit-maximizing price searching, a monopoly firm must be able to
A) prevent the entry of other firms into the market for its product. B) induce the entry of other firms into the market for its product. C) avoid earning negative economic profits in the short run. D) always earn zero economic profits.
Stabilizing the economy by fiscal policy need not imply a tendency toward “big government.”
Answer the following statement true (T) or false (F)
With demand-pull inflation in the extended AD-AS model, there is:
A. A decrease in aggregate demand and a decrease in unemployment that eventually increases nominal wages B. An increase in aggregate demand and a decrease in unemployment that eventually decreases nominal wages C. An increase in aggregate demand and an increase in unemployment that eventually decreases nominal wages D. An increase in aggregate demand and a decrease in unemployment that eventually increases nominal wages