Refer to the diagram for a monopolistically competitive firm. If more firms were to enter the industry and product differentiation were to weaken, then:
A. resource misallocation would become more severe.
B. the demand curve would become more elastic.
C. equilibrium output would decline and equilibrium price would rise.
D. equilibrium output would decline and equilibrium price would fall.
B. the demand curve would become more elastic.
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When the Federal Reserve lends reserves to depository institutions, it charges them interest. That interest rate is called the
A) federal funds rate. B) loan rate. C) prime rate. D) discount rate.
Jones and Smith live in the same apartment building. Jones loves to play his opera recordings so loudly that Smith can hear them. Smith hates opera. Jones receives $100 of benefits from his music and Smith suffers $60 of damages. a
From an efficiency perspective, should Jones be allowed to play his opera CDs? b. Suppose the apartment building does not have any rules about noise. Jones and Smith can bargain at zero cost. Will they reach an agreement where Jones gives up his beloved operas? c. Now suppose the apartment building passes a rule that says residents are not allowed to play music their neighbors can hear if any of the neighbors object. As before, Jones and Smith can bargain at zero cost. Will Jones be allowed to play his music?
Refer to Figure 11-2. Short run output is maximized at
A) L1. B) L2. C) L3. D) insufficient information to determine
In the open-economy macroeconomic model, the market for loanable funds equates national saving with
a. domestic investment. b. net capital outflow. c. national consumption minus domestic investment. d. None of the above is correct.