Since firms within a monopolistically competitive industry set output where marginal revenue is equal to marginal cost, the size of the fixed entry cost does not impact the equilibrium price.
Answer the following statement true (T) or false (F)
False
Rationale: The size of the fixed entry cost determines how much market power each firm in the industry will have in equilibrium -- and therefore does affect the equilibrium price.
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In the United States since 1970, the quantity of M1 money people hold as a percentage of GDP has
A) decreased. B) remained constant. C) decreased at first and then increased. D) increased at first and the decreased. E) increased.
If an increase in crime causes households to spend money on police and security systems, GDP will rise
Indicate whether the statement is true or false
Answer the following questions true (T) or false (F)
1. It is possible to have an absolute advantage in producing a good or service without having a comparative advantage. 2. If Blake can pick more cherries in one hour than Cody, then Blake has a comparative advantage in cherry picking. 3. The basis for trade is absolute advantage, not comparative advantage.
Higher interest rates are likely to
A. decrease consumer spending and increase consumer saving. B. increase consumer spending and decrease consumer saving. C. decrease both consumer spending and consumer saving. D. have no effect on consumer spending or saving.