Monopolistically competitive firms differentiate their products by:
A. selling products with slightly different physical characteristics.
B. selling products at different locations.
C. creating a special aura or image for the product with advertising.
D. All of these
Answer: D
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Suppose the shopkeeper is known to usher low bidders out of the store even if it means giving up the sale. If the customer moves first, he would
a. Offer the high price b. Offer the low price c. Get ushered out of the store d. All of the above
Explain the excess burden of a tax on luxury yachts
Which of the following statements is correct?
a. Economists almost always find it easy to conduct experiments in order to test their theories. b. Economics is not a true science because economists are not usually allowed to conduct experiments to test their theories. c. Economics is a social science rather than a true science because it cannot employ the scientific method. d. Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history.
Refer to the accompanying figure. Suppose that the government requires that resources be used efficiently. Which of the following would the government definitely not allow?
A. Production at point D. B. Specialization in medical care production. C. Specialization in warhead production. D. Production at any point other than C.