Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run, monopolistically competitive firms will not
a. operate where price equals marginal cost
b. charge a higher price than firms in perfect competition
c. produce a smaller quantity than firms in perfect competition
d. produce where price equals average total cost
e. exit when demand falls below long-run average costs
A
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Inflation is a measure of the ________ of prices; the CPI is a measure of the ________ of prices.
A. current level; rate of change in the level B. index; base year's level C. base year's level; index D. rate of change in the level; current level
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Which of the following is an implication of deflation:
(a) Savings are discouraged; (b) Exports are more expensive; (c) Reduction in business revenue; (d) Excessive wage demands.
If you work 4 extra hours, and the slope of the curve showing the relationship between your income and work hours is 8, your income will increase by:
A. $2. B. $4. C. $12. D. $32.