Compared to pure competition, monopolistic competition:
A. provides greater product differentiation at the cost of some excess capacity.
B. offers less product differentiation but attains equal productive efficiency.
C. offers less product differentiation and lower productive efficiency.
D. provides greater product differentiation and achieves greater productive efficiency.
Answer: A
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If firms are protected by substantial barriers to entry, short-run profits can turn into long-run profits
Indicate whether the statement is true or false
Reducing business taxes or providing specific investment incentives can shift the demand for loanable funds curve
a. rightward, slow the growth of the capital stock, and improve the standard of living b. rightward, speed the growth of the capital stock, and improve the standard of living c. leftward, speed the growth of the capital stock, and reduce the standard of living d. rightward, speed the growth of the capital stock, and reduce the standard of living e. leftward, slow the growth of the capital stock, and reduce the standard of living
Assume that Szmul Hertz has an MPC equal to 0.80 . If he normally earns $40,000 per year, but is laid off for part of 2000 and only earns $25,000 . his consumption for 2000 . according to Milton Friedman, will be
a. $16,000 b. $12,000 c. $32,000 d. $40,000 e. $25,000
In a particular production process, if the quantities of all inputs used are increased by 60%, then the quantity of output increases by 60% as well. This means that
a. the production process cannot be enhanced by technological advances. b. no mathematical representation of the relevant production function can be formulated. c. the relevant production function has the limits-to-growth property. d. the relevant production function has constant-returns-to-scale.