Which of the following is a distinction between perfectly competitive and monopolistic competition?
A. Perfectly competitive firms must compete with rival sellers; monopolistically competitive firms do not confront rival sellers.
B. Monopolistically competitive firms can raise their price without losing sales; perfectly competitive firms must lower their price in order to sell more of their product.
C. Perfectly competitive firms confront a perfectly elastic demand curve; monopolistically competitive firms face a downward-sloping demand curve.
D. Perfectly competitive firms may make either economic profits or losses in the short run, but monopolistically competitive firms always earn an economic profit.
Answer: C
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Which of the following is most likely to be a fixed cost for a business?
a. expenditures on low-skill labor. b. shipping charges for the delivery of products. c. managerial salaries. d. property taxes on the firm's buildings.
Some products of the knowledge economy
A) have an initial marginal cost that is very low and then rises. B) have no marginal costs. C) have an initial marginal cost that is very high and then falls to zero. D) none of these choices.
For most commonly used social welfare functions, an efficient allocation is
A) always preferred over any inefficient allocation. B) not possible. C) usually preferred. D) never preferred.
HAC standard errors should be used because
A) they are convenient simplifications of the heteroskedasticity-robust standard errors. B) conventional standard errors may result in misleading inference. C) they are easier to calculate than the heteroskedasticity-robust standard errors and yet still allow you to perform inference correctly. D) when there is a structural break, then conventional standard errors result in misleading inference.