Which of the following is NOT a characteristic of monopolistic competition?
A) large number of sellers
B) differentiated products
C) advertising
D) barriers to entry
Answer: D
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Currency devaluations hurt consumers because they make imports ________ expensive in the _____________ currency
a. Less; domestic b. Less; foreign c. More; domestic d. More; foreign
Cost-benefit analysis is important to determine the role of government in our economy because
a. the government should provide all goods for which the benefits exceed the costs. b. cost-benefit analysis identifies the possible gains to society from government provision of a particular good. c. markets for private goods cannot effectively assign costs and benefits. d. cost-benefit analysis is the best tool to identify market failures.
Why is efficiency desirable?
A) It results in an equal distribution of income. B) It results in the highest prices for the goods and services produced. C) It makes best use of the available resources. D) It is the most politically popular solution.
Suppose Cournot duopolist firms operate with each having a cost of 30qi (i = 1,2 ) so that each firm's marginal cost is 30. The inverse market demand curve is P = 120 - Q where Q = q1 + q2. Suppose there were no barriers to entry and firms continued to enter so long as there were positive economic profits. At the Nash-Cournot equilibrium, the price, P, is
A) 30. B) 45. C) 60. D) 90.