The city of Burgersville has 100 restaurants specializing in hamburgers. Each one tries to do its own special take on the hamburger, as well as having its own decorative and advertising styles. This ______________ creates monopolistic competition.
a. distinctiveness
b. similarity
c. imperfectly competitive market
d. perfectly competitive market
a. distinctiveness
Monopolistic competition involves many firms competing against each other but selling products that are distinctive in some way.
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One way to ensure all producers benefit from a price floor is to:
A. give a government guarantee to buy all surplus. B. ration a certain quantity per consumer. C. ration a certain quantity per producer . D. All of these are examples of ensuring all producers benefit using non-price methods.
Which one of the following would not affect the position of the supply curve for cranberries?
A. the popularity of cranberry drinks B. the cost of fertilizers for cranberry production C. the number of sellers in the market D. development of a new pest control for cranberries
If Sam is willing to pay $50 for one unit of good X, $30 for a second, $20 for a third, $8 for a fourth, and the market price is $10, then Sam's consumer surplus is:
A. $40 and he buys 1 unit of good X. B. $60 and he buys 2 units of good X. C. $70 and he buys 3 units of good X D. $68 and he buys 4 units of good X.
A friend is telling you that they tend to drink more at parties than they do at home. You ask about why and they tell you that though they enjoy their fifth and sixth drinks the same regardless of where they are. Based on the fact that it is free at the party and they have to pay to replace it at home, you can translate the statement into a verification of
A. the notion of diminishing marginal utility. B. the real-balances effect. C. the substitution effect.