Use the following graph for a monopolistically competitive firm to answer the next question. 
This monopolistically competitive firm is earning economic profits in the short run and
A. will continue to have economic profits in the long run.
B. this will cause its demand curve to shift to the right in the long run.
C. will earn only normal profits in the long run.
D. this will cause its cost curves to rise in the long run.
Answer: C
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What happens to M1 and M2 due to each of the following changes?
(a) You take $500 out of your checking account and put it into a passbook savings account. (b) You take $1000 out of your checking account and buy traveler's checks. (c) You take $1500 out of your money—market mutual fund and deposit into your checking account. (d) You cash in $2000 in savings bonds and invest the money in a certificate of deposit.
If a project involves risk, managers can account for the risk by ________ the discount rate, which ________ the present value of the future profits.
A) increasing; decreases B) decreasing; decreases C) increasing; increases D) decreasing; increases
In the capital market, the purchase price is what a:
A. producer pays to use a factor of production for a certain period or task. B. producer pays to gain permanent ownership of a factor of production. C. consumer pays to use labor or land services for a certain period or task. D. consumer pays to gain permanent ownership of a factor of production.
What did Porter call the concept where firms are typically most sensitive to the needs of their closest customers?
What will be an ideal response?