If profits in a monopolistically competitive market are positive, we can conclude that:
A. price is equal to average cost.
B. price is greater than average cost
C. the market is in long-run equilibrium.
D. price is less than average cost.
Answer: B
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The typical family on the Planet Econ consumes 10 pizzas, 7 pairs of jeans, and 20 gallons of milk. In 2008, pizzas cost $10 each, jeans cost $40 per pair, and milk cost $3 per gallon. In 2009, the price of pizzas went down to $8 each, while the prices of jeans and milk remained the same. Between 2008 and 2009, a typical family's cost of living:
A. remained the same. B. increased by 4.5 percent. C. decreased by 4.5 percent. D. decreased by 20 percent.
When the AE line lies above the 45° line,
A) real GDP exceeds aggregate planned expenditure. B) there are unplanned increases in inventories. C) aggregate planned expenditure is less than real GDP. D) the price level is rising. E) there are unplanned decreases in inventories.
Evidence that convergence occurs within economies is drawn in part from the example of ________
A) Hiroshima and Nagasaki Japan B) North and South Korea C) West and East Germany during the Cold War D) Hong Kong and Singapore
Assume that the United States imposes a quota on Scottish wool suits. Relative to the equilibrium price that would exist in the absence of quotas, the equilibrium price of suits in the United States will most likely _______ , and the equilibrium price of suits in Scotland will most likely _______ .
A) remain the same; decrease B) remain the same; increase C) increase; increase D) increase; decrease