Which of the following is FALSE about a comparison between a perfectly competitive firm and a monopolistically competitive firm?
A) A perfectly competitive firm has a horizontal demand curve, while a monopolistically competitive firm has a downward sloping demand curve.
B) In the short run, a perfectly competitive firm will earn zero economic profits, while a monopolistically competitive firm will earn positive economic profits.
C) Both the perfectly competitive and monopolistically competitive firm will earn economic profits equal to zero in the long-run.
D) In the long run, the perfectly competitive firm will produce at the minimum of the average total cost curve, while the monopolistically competitive firm will produce to the left of the minimum of the average total cost curve.
B
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A firm is thinking of hiring an additional worker to their organization who they believe can increase total productivity by 100 units a week. The cost of hiring him or her is $1500 per week. If the price of each unit is $12,
a. the MR of hiring the worker is $1500
b. The MC of hiring the worker is $1200
c. The firm should not hire the worker since MB
Barter requires
a. that the exchanged goods be portable b. that the exchanged goods be durable c. a double coincidence of wants d. that the exchange medium be divisible e. an effective middleman
Fiscal stimulus is most likely to direct resources into productive projects when spending decisions are left in the hands of
a. government agencies. b. consumers. c. Congress. d. lobbyists and special-interest groups.
Which of the following taxes is most likely to reduce inequity?
A. A sales tax. B. A gasoline tax. C. A local property tax. D. The federal income tax.