In the long run in a monopolistically competitive market, a firm will, in theory,
A) earn economic profits.
B) suffer losses.
C) break even.
D) earn zero accounting profits.
C
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Recall the Application. As the world price of wool decreased, the quantity of wool supplied by individual ranchers would ________, and the quantity supplied in the whole market would ________
A) decrease; increase B) increase; decrease C) increase; increase D) decrease; decrease
In the event of excess supply in the coffee market
A) the price of coffee will increase. B) the price of coffee will decrease. C) the supply of coffee will decrease (supply will shift to the left) to meet the demand. D) the demand for coffee will increase (demand will shift to the right) to meet the supply.
Banks hold some deposits on reserve at the Fed because
A) the Fed requires every bank to hold at least $100 million on deposit at all times. B) the Fed will insure those deposits, but will not insure regular bank deposits. C) these are membership dues for being a member bank. D) these deposits meet the reserve requirements of the Fed.
The term for a broad measure of the balance of trade that includes trade in goods and services as well as international flows of income and foreign aid is
a. current account balance. b. merchandise trade balance. c. unilateral transfer balance. d. goods account balance.