Which of the following is not a characteristic of monopolistically competitive firms in the long run:
A. there is no deadweight loss.
B. firms charge a price above marginal cost.
C. each firm maximizes profits.
D. firms earns zero profits
Answer: A
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The time it takes to pass legislation to implement a particular policy is called
A) the data lag. B) the recognition lag. C) the legislative lag. D) the implementation lag. E) the effectiveness lag.
Assuming that w and r are both positive, if the long-run expansion path is horizontal, then
A) = 0. B) MRTS is a function of capital only. C) w = r. D) All of the above.
If the economy were producing at point E and moved to point D,
A. the unemployment rate would increase.
B. the unemployment rate would decrease.
C. the production possibilities would shift outward.
D. the economy would shift resources from producing butter to increasing the production of guns.
Which one of the following statements is false?
a. The economically optimal level of production is less than the open-access equilibrium level of production b. The economically optimal level of production occurs at the maximum sustainable yield c. Charging a license fee for access to a common resource will reduce the production level below the open-access equilibrium d. The "tragedy of the commons" is more likely to occur as production effort increases e. A license fee will reduce the incentives for entry into a market