The key characteristics of a monopolistically competitive market structure include
A) many small (relative to the total market) sellers acting independently.
B) barriers to entry are strong.
C) all sellers sell a homogeneous product.
D) sellers have no incentive to advertise their products.
Answer: A) many small (relative to the total market) sellers acting independently.
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Which of the following will result in a firm increasing its level of production?
a. An increase in its Marginal Costs. b. A decrease in its Marginal Revenue. c. An increase in its Fixed Costs. d. An increase in the price of its product.
Which of the following statements is false?
A) Capital consists of produced goods that can be used as inputs for further production.
B) The terms resources, inputs, and factors of production are synonyms.
C) Labor consists of the physical, but not mental, talents of people who contribute to the production process.
D) Entrepreneurship is one of the four categories of resources.
E) The resource category land includes natural resources, such as minerals, forests, water, and unimproved land.
An increase in aggregate supply (shift to the right) will cause the price level to
a. rise and real GDP to rise b. rise and real GDP to fall c. rise and the unemployment rate to fall d. fall and real GDP to rise e. fall and the unemployment rate to rise
Laurel and Janet are competitors in a local market and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $5,000 . If neither of them advertise, each will earn a profit of $10,000 . If one advertises and the other doesn't, then the one who advertises will earn a profit of $12,000 and the other will earn $2,000 . In this version of the
prisoners' dilemma, if the game is played only once, Laurel should a. advertise, but if the game is to be repeated many times she should probably not advertise. b. advertise, and if the game is to be repeated many times she should still probably advertise. c. not advertise, but if the game is to be repeated many times she should probably advertise. d. not advertise, and if the game is to be repeated many times she should still not advertise.