What are the characteristics of monopolistic competition?
Monopolistic competition is characterized by a large number of sellers selling a differentiated product. There are relatively weak barriers to entry and firms compete aggressively on a nonprice basis.
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When we choose a particular option, we must give up alternative options. The highest-valued alternative forgone is the ________ of the option chosen
A) opportunity cost B) comparative advantage C) nonmonetary cost D) absolute advantage
A contractionary monetary policy can reduce the inflation rate without causing a rise in unemployment if expectations are formed rationally and monetary policy is
A) combined with expansionary fiscal policy. B) carried out in total secrecy. C) publicly announced and credible. D) combined with contractionary fiscal policy.
Given the scenario described, if the market price of hammers decreased from $15 to $11:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13.. A. total producer surplus would fall by $4. B. producer surplus for each producer falls by $4. C. House Depot's producer surplus falls by $4. D. total producer surplus falls by $8.
A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon, it sold 33% less milk. Since everything else remained the same, we would say the
a. demand for milk is perfectly elastic b. demand for milk is elastic c. demand for milk is perfectly inelastic d. demand for milk is unitary elastic e. law of supply does not apply in this situation