The greater the the number and closeness of substitutes available between monopolistically competitive firms
A. the greater the positive economic profits for a single firm.
B. the smaller the ability of a firm to raise its price above the price of close substitutes.
C. the more inelastic the demand curve.
D. the greater the ability of a firm to raise its price above the price of close substitutes.
Answer: B
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It's not unusual for strangers driving through a small town to find a gas station more quickly than people driving through a major city center
According to the economic way of thinking, gas stations in city centers appear few and far between because A) big cities are just plain confusing to out-of-towners. B) the real estate space available for gas stations has more valuable alternative uses. C) the opportunity cost of placing additional gas stations in city centers is too low. D) the owner of gas stations would rather have people drive further distances and thereby use more gasoline.
If the marginal social benefit of consuming a good or a service exceeds the marginal private benefit
A) a positive externality exists. B) a negative externality exists. C) the sum of consumer surplus and producer surplus is maximized. D) the market achieves economic efficiency.
The authors claim that monopolists will tend to practice stronger conservation of depletable resources than would occur under a perfectly competitive market structure. Why is this true?
A) Monopolists are typically taxed at higher rates than competitive firms, so they will tend to reduce output and revenues in order to minimize their tax expenditures. B) The profit-maximizing decisions of a monopolist tend to generate lower output levels than under perfect competition, so the resource is depleted at a slower rate by the monopolist. C) Common property resource problems do not arise when there is only one seller. D) The lower depletion rate used by monopolists serves as a barrier to entry.
With respect to wealth in the United States, we presently find that the richest one percent of Americans own approximately how much of the nation's wealth?
A) 10 percent B) 35 percent C) 70 percent D) 85 percent