Why do monopolistically competitive firms fail to reach productive efficiency?
a. They fail to produce enough output to reach the highest cost.
b. They produce too much output to reach the highest cost.
c. They fail to produce enough output to reach the lowest cost.
d. They produce too much output to reach the lowest cost.
c. They fail to produce enough output to reach the lowest cost.
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When the price of raisins falls, the quantity of raisins demanded rises. Explain this change in terms of income and substitution effects
What will be an ideal response?
A decline in real mortgage rates will lead, other things the same, to ________
A) lower demand for housing B) tighter financing constraints C) an increase in residential investment D) a lower relative price of housing
Suppose an oil company wants to make its total revenue as large as possible. It should charge a price at which the demand for oil is:
a. elastic. b. unitary elastic. c. inelastic. d. perfectly inelastic.
Two variables are negatively correlated if:
A. they move in the same direction. B. they move in the opposite direction. C. their movements tend to be unrelated. D. one is simply a multiple of the other.