Describe the typical demand curve facing an individual firm in perfectly competitive, monopoly, and monopolistically competitive markets. Explain what the shape of each firm's demand curve indicates about the amount of market power each firm possesses.
What will be an ideal response?
The perfectly elastic demand curve facing a perfectly competitive firm indicates that the firm has no market power. If the firm raises its price above the market price, it will lose all of its customers. The increasing inelasticity of the demand curves for the monopolistically competitive and the monopoly firms show increasing market power-that is, an increasing ability to raise prices without losing a significant proportion of customers.
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Do you agree or disagree with the following statement: "If, in the neoclassical model of decision making, the discount factor changes over time, the predictions of the beta-delta model could be mimicked in the neoclassical model." Explain.
What will be an ideal response?
Interest is most fundamentally a measure of
A) the cost of money. B) the scarcity of money. C) the greater subjective value of present over future goods. D) all of the above. E) none of the above.
Which of the following is true?
a. Producing too much pollution could be a market failure, but producing too little research cannot. b. Producing too little research could be a market failure, but producing too much pollution cannot. c. Both producing too much pollution and producing too little research could be market failures. d. Market failures mean that government intervention in those areas will improve the results.
The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A