Which of the following is true of the model of monopolistic competition?
a. Barriers to entry enable firms to enjoy positive profits in the long run.
b. The number of firms declines over time as a result of economies of scale.
c. The monopolistically competitive firms enjoy a greater market power than a monopolist.
d. Firms tend to locate near each other in order to minimize total travel costs for consumers.
e. The firms end up charging same prices for their individual products.
d
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The main factor that explains the difference between accounting cost and economic cost is
A) opportunity cost. B) fixed cost. C) variable cost. D) All of the above help to explain the difference.
One drawback to industrial policy is that
a. technology spillovers are too expensive to control. b. measuring the size of spillovers from different markets is difficult. c. spillovers often occur in industries that produce undesirable products for society. d. positive side effects are often outweighed by negative side effects.
The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year.
With the open trade economy, Silvia and Art can consume any combination of beef and computers from the line
A. XY. B. PQ. C. PY. D. XYZ.
When an economy produces its potential output, _____ is zero.
Fill in the blank(s) with the appropriate word(s).