Firms gain control over price in monopolistic competition by
A. blocking entry of other firms into the industry.
B. colluding with other firms to set prices.
C. producing a product for which there are no close substitutes.
D. differentiating their products.
Answer: D
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Donna owns the only dog grooming salon on Lonely Island. If Donna can price discriminate between dog owners who are seniors and those who are not, her economic profit will be ________ than if she does not price discriminate and the number of dog
groomings will be ________ than if she does not price discriminate. A) greater; more B) greater; less C) less; more D) less; less
Lowering the discount rate will
A) increase reserves, encourage banks to make more loans, and increase the money supply. B) decrease reserves, encourage banks to make fewer loans, and increase the money supply. C) decrease reserves, encourage banks to make fewer loans, and decrease the money supply. D) increase reserves, encourage banks to make more loans, and decrease the money supply.
If expectations are adaptive, how will the economy adjust to a new long-run equilibrium in response to expansionary monetary policy? Support your answer with a graph of the Phillips curve
What will be an ideal response?
Total federal government spending in 2007 was
a. less than $100 billion b. between $125 billion and $250 billion c. $750 billion d. over $2.8 trillion e. over $12.5 trillion