One of the sources of monopoly power for a monopoly may be:
A. diseconomies of scale.
B. differentiated products.
C. free entry and exit.
D. patents.
Answer: D
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Monopolistic competition in long-run equilibrium is characterized by
A. excess capacity. B. higher cost per unit of output than under perfect competition. C. inefficiency in use of resources. D. All of the responses are correct.
All of the following countries come close to the free market benchmark except
A) Canada. B) Germany. C) North Korea. D) Singapore.
Why does diversification fail to reduce risk when the returns of the two investments purchased are perfectly positively correlated?
What will be an ideal response?
When the U.S. economy hits a recession, fiscal policy automatically becomes:
A. expansionary because average tax rates go down and spending on welfare programs goes up. B. discretionary because the government is quick to react to changes in the business cycle. C. contractionary because average tax rates go up and spending on welfare programs goes down. D. contractionary because average tax rates go down and spending on welfare programs goes up.