Which of the following is TRUE for a monopolistically competitive firm?
A) MR = P
B) MR > P
C) MR < P
D) MR = AFC
C
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According to the kinked demand curve model, if an oligopolistic firm lowers its price, it should expect to see its total revenue:
A) increase. B) stay the same. C) decrease D) cannot be determined without more information.
A consumer purchases housing (H) and spends the remainder of income on the composite good (C). The government is considering one of two policies. Policy A taxes housing by $50 per unit consumed
With the tax in place, the consumer purchases 100 units of housing. Policy B collects a lump-sum tax of $5,000 from the consumer's income. Compare the effects of the policies on the consumer's utility/well-being and the amount of housing and composite goods purchased.
Under the flexible exchange rate system, when a country tries to stimulate economic growth and improve its employment rates, it is likely to cause:
a. the domestic inflation rate to rise and the domestic currency to depreciate. b. the domestic inflation rate to rise and the domestic currency to appreciate. c. the domestic inflation rate and the value of the domestic currency to remain constant. d. the domestic inflation rate to fall and the domestic currency to appreciate. e. the domestic inflation rate to fall and the domestic currency to depreciate.
Market prices provide information to consumers, helping them coordinate their activities so long as
a. competition is present and buyers and sellers are free to choose mutually agreeable prices. b. prices are not allowed to rise too high, causing a shortage. c. prices are legally kept equal in all markets, preventing unfair price increases in markets with shortages and unfair price decreases when a market surplus is present. d. the government carefully screens producers and effectively keeps inefficient producers out of the market.