GDP during a period can be calculated by summing either
a. the purchases of domestically produced final goods and services or the cost incurred in the production of those goods.
b. the amount received by business firms for consumer goods and services or the spending of business firms on investment goods and services.
c. all household expenditures on final goods and services or all business purchases of factors of production.
d. sales of goods and services to foreigners or the purchase of goods and services from foreigners
A
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Compared to a perfectly competitive firm, in a long run the monopolistically competitive firm will have
A) a lower price. B) a lower average cost. C) a horizontal demand function. D) a lower rate of output.
In a long-run monopolistically competitive equilibrium
A) P = ATC, and ATC is not at its minimum value. B) P = ATC, and ATC is at its minimum value. C) P > ATC, and ATC is at its minimum value. D) P > ATC, and ATC is not at its minimum value.
Technology or production processes developed in a particular country:
A. may give that country a temporary comparative advantage. B. may set that country back until they earn back the research and development costs. C. will give that country a permanent comparative advantage. D. generally are not transferrable to other nations.
An effective agreement to divide up the market among firms selling products that are close substitutes
A) allows each firm to earn positive net revenue even though its marginal cost is greater than its marginal revenue. B) allows each firm to earn positive net revenue by preventing cooperation from reducing each firm's marginal revenue below its marginal cost. C) tends to keep each firm's price and marginal revenue above its marginal cost. D) tends to result in both higher prices and larger output.