Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition
What will be an ideal response?
The additional selling costs from product differentiation and marketing increase consumer choice by providing variety. This benefits society and weighs in favor of the efficiency of monopolistic competition. However, selling costs can add to the product's price. Also, at times the product differentiation is more apparent than real. These factors harm society and count against the efficiency of monopolistic competition.
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"Crowding out" refers to federal government deficits financed by:
A. borrowing which increases interest rates and thereby reduces private spending. B. increasing taxes which reduces private spending. C. the federal government buying foreign debt which reduces the amount of government spending and government programs. D. reducing government spending which reduces interest rates.
When the market price of a good is below its equilibrium price, competition among
A. buyers will push the price up. B. buyers will push the price down. C. sellers will push the price up. D. sellers will push the price down.
Games that don't have a dominant strategy:
A. don't exist; all games have at least one dominant strategy. B. may have stable equilibrium outcomes. C. always have stable equilibrium outcomes. D. do not have stable equilibrium outcomes.
Answer the following statement true (T) or false (F)
1) Unlike most demand curves, the demand curve for loanable funds is upsloping. 2) Present value is the amount to which some current amount of money will grow as interest compounds over time. 3) The time-value of money refers to the idea that a given amount of money is more valuable to a person the sooner it is received. 4) The future value of $3,000 deposited today at 5 percent interest is $3,646.52 four years from now. 5) The present value of $4,000 deposited today at 8 percent interest is $5,038.85 three years from now.