In the long run, international trade allows a monopolistically competitive firm an opportunity:
a. to produce more output and earn monopoly profits.
b. to produce less output and earn monopoly profits.
c. to produce more output and reduce its average costs.
d. to produce less output and increase its average costs.
Ans: c. to produce more output and reduce its average costs.
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Most economists agree that the measured unemployment rate tends to ________ the unemployment problem
A) overstate B) understate C) accurately represent D) There is little agreement among economists regarding this issue.
Many firms use technology to gather information on the preferences of consumers and their responses to changes in prices. This information is then used to adjust prices of the firms' goods and services. This practice is called
A) price discovery. B) yield management. C) empirical research. D) econometrics.
A uniform-abatement policy is:
A. inefficient because it does not exploit the differences in abatement costs among firms. B. efficient because an equal amount of pollution is assigned to each firm. C. inefficient because it incurs relatively low compliance costs. D. efficient because it helps firms lower their production costs.
The expected damage to innocent third parties per unit of the good produced is shown as the "external cost" in Figure 27.1. An unregulated competitive market for the product produces a quantity of Q* units, which sell for a price of P* per unit. If the competitive industry were producing the socially optimal quantity of this product, the market price of the product per unit would be 
A. P?-P*. B. P?. C. P*. D. zero.