How does the long-run equilibrium of a monopolistically competitive industry differ from that of a perfectly competitive industry?
A) A firm in monopolistic competition will charge a price higher than the average cost of production but a firm in perfect competition charges a price equal to the average cost of production.
B) A firm in monopolistic competition will earn economic profits but a firm in perfect competition earns zero profit.
C) A firm in monopolistic competition produces an allocatively efficient output level while a firm in perfect competition produces a productively efficient output level.
D) A firm in monopolistic competition does not take full advantage of its economies of scale but a firm in perfect competition produces at the lowest average cost possible.
D
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If the Marginal utility of the first bar of chocolate that Dan eats is 5 utils, then which of the following is most likely to be true?
a) Dan will eat 5 bars of chocolate. b) The marginal utility of the second bar of chocolate that Dan eats will be less than 5 utils. c) The marginal utility of the second bar of chocolate that Dan eats will be greater than 5 utils. d) None of the above.
An increase in demand occurs when
A. quantity demanded is greater than quantity supplied. B. quantity supplied is greater that quantity demanded. C. the demand curve shifts upward and to the right. D. there is a leftward shift in the demand curve.
In order to make a rational choice, people must
A) decide quickly without wasting time. B) be able to afford the choice decided upon. C) determine what is in the social interest. D) only know what they want. E) compare marginal costs and marginal benefits.
Which of the following is counted as "capital" in economics?
A) the money people have B) the wealth people have C) the machines workers have to work with D) the labor force