In long-run equilibrium in a monopolistically competitive industry, a firm will
A) always earn an economic profit.
B) produce an output rate at which P = MC.
C) produce at a point to the left of the minimum point on its average total cost curve.
D) have a perfectly elastic demand curve.
C
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Suppose we observe that the price of gasoline has been rising, even though the quantity of gasoline sold has been falling. We can conclude that
a. the law of supply does not hold for gasoline. b. the law of demand does not hold for gasoline. c. the demand for gasoline must have fallen. d. the supply of gasoline must have fallen.
Hot dogs and hot dog buns are found to be related by the cross elasticity of demand. If they are complementary goods, the cross elasticity will be
A. positive. B. equal to zero. C. negative. D. unknown.
In the Keynesian model, when desired saving exceeds desired investment,
A) inventories rise. B) inventories fall. C) the price level rises. D) the price level falls.
An import quota
A) is a price ceiling imposed on an imported good. B) is a price floor imposed on an imported good. C) is a supply restriction limiting the quantity of a good that can be imported. D) is a legislative requirement stating that firms which import some of their merchandise must hire a certain number of immigrant workers.