Use the following graph for a monopolistically competitive firm in a constant-cost industry to answer the next question. 
This firm is
A. not in either short-run or long-run equilibrium.
B. in both short-run and long-run equilibrium.
C. in short-run equilibrium, but not long-run equilibrium.
D. in long-run equilibrium, but not short-run equilibrium.
Answer: C
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Which of the following observations is true?
A. Free markets will achieve all of society’s goals. B. The ability to buy goods is divided equally among consumers. C. The market leads to efficiency in production through the profit motive. D. The market system encourages firms to use inputs wastefully.
Total income
A) excludes profits. B) includes only wages and interest payments. C) is the yearly amount earned by owners of the nation's resources. D) includes only wages received by workers.
At a fixed level of worker productivity, ________
A) lower wages reduce quantity of labor demanded B) higher wages reduce cost of production C) higher wages reduce profits D) lower wages increase quantity of labor supplied
All of the following are examples of positive statements EXCEPT:
A. Tax revenues increase as output per person increases. B. As output per person increases access to consumer goods increases. C. Growth in an economy generates a budget surplus. D. High rates of economic growth are undesirable because of the destruction caused to the environment.