The freedom of entry and exit in monopolistic competition means that firms
A) enter the market when economic losses are being suffered.
B) exit the market when economic profits are being earned.
C) enter the market when normal profits are being earned.
D) can enter a market to compete for economic profits and leave when economic losses are being incurred.
E) find it easy to permanently earn an economic profit.
D
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Using Figure 3 below, suppose that the economy was at Y1. This level of GDP would be considered:
A. inflationary.
B. recessionary.
C. a long run level of output.
D. a natural rate of output.
The principle that the opportunity cost increases as the production of one output expands is the:
a. law of demand. b. law of increasing opportunity costs. c. law of increasing returns to scale. d. law of supply.
The common currency of the EU, the euro, was created in
A) 1985. B) 1992. C) 1999. D) 2004.
The Lorenz curve shows what portion of total money income is accounted for by
A) different proportions of a country's households. B) only the wealthiest citizens. C) only poor people. D) taxpaying citizens only.