Which of the following goods are not close substitutes?
a. Peanut butter and jelly
b. Margarine and butter
c. Tea and coffee
d. Beef and chicken
Answer: a. Peanut butter and jelly
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Suppose that in October the price of a cup of cafe latte was $2.50 and 400 lattes were consumed. In November the price of a latte was $2.00 and 600 lattes were consumed. What might have caused this change?
A) The price of coffee beans (an input of production of cafe lattes) fell. B) The price of coffee beans (an input of production of cafe lattes) rose. C) The price of tea (a substitute for cafe lattes) rose. D) The price of tea (a substitute for cafe lattes) fell.
Most currency trades in London do not involve the British pound
Indicate whether the statement is true or false
Monopolistic competition is characterized by
A) ease of entry. B) many sellers. C) product differentiation. D) all of these choices characterize this market.
Explain how short-run and long-run equilibrium in monopolistic competition differ. Use graphs to illustrate your answer. Be sure that your graphs are completely and correctly labeled.
What will be an ideal response?