The entry and exit of firms in a monopolistically competitive market guarantee that
A) marginal revenue equals marginal cost and average total cost is minimized.
B) firms can earn economic profits in the long run.
C) price equals average total cost in the long run.
D) firms can earn economic profits in the short run.
Answer: C
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What does the text suggest might be a possible advantage of being an economically "backward" nation?
A) Illiteracy B) The fact that many women have been systematically denied education, and have therefore learned to become very good homemakers, which is a prerequisite for a stable society C) The nation can adopt the advanced technologies of other nations without having to incur all the costs of research and development. D) If you invert the per capita GDP figures of the so-called "backward" countries, you find they are, in real terms, among the wealthiest nations in the world.
In the short run, an expanded money supply leads to:
a. a higher nominal interest rate. b. no change in the nominal interest rate. c. a lower nominal interest rate. d. an increase in the exchange rate.
Using the above table, at a price of $70, there is
A. a shortage of 120 units. B. a surplus of 150 units. C. a surplus of 270 units. D. a shortage of 150 units.
A multiplier of 1 means the MPS is equal to 1.
Answer the following statement true (T) or false (F)