Figure 11.4Figure 11.4 depicts demand and costs for a monopolistically competitive firm. If the firm's demand curve shifts to the left as more firms enter the market:
A. the firm's profit will be smaller at the new profit maximizing output level.
B. the firm's profit will be greater at the new profit maximizing output level.
C. the firm's profit will remain the same at the new profit maximizing output level.
D. There is not sufficient information.
Answer: A
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An increase in the nominal exchange rate, e, defined as the number of units of the foreign currency that one unit of the domestic currency will buy, indicates that the domestic currency has ________ relative to the foreign currency.
A. depreciated B. become undervalued C. appreciated D. become overvalued
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Suppose that when disposable income rises from 5.2 trillion to 6 trillion, consumption rises from 5 trillion to 5.6 trillion. What is the marginal propensity to save?
What will be an ideal response?
If demand is unit elastic, then
A. the unit change in quantity demanded equals the unit change in price. B. a ten percent increase in price leads to a one percent decrease in quantity demanded. C. an increase in price of any amount leads to quantity demanded falling to zero. D. a two percent increase in price leads to a two percent decrease in quantity demanded.