Monopolies can earn positive economic profits in the long run while monopolistically competitive firms cannot due to
A. market power of monopolies while monopolistically competitive firms have no market power.
B. barriers to entry in monopoly but not in monopolistic competition.
C. economies of scale in monopolies but not in monopolistic competition.
D. the less elastic demand faced by monopolies as compared to monopolistically competitive firms.
Answer: B
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When a firm is experiencing decreasing marginal costs, it could be because
a. The average costs are increasing b. The firm is going down its learning curve c. The firm's marginal productivity is increasing d. Both C and D
For a number of years Canada and many European countries have had higher average unemployment rates than the United States. The Phillips curve suggests that these countries
a. have higher average inflation rates than the United States. b. have long-run Phillips curves to the right of the United States'. c. may have less generous unemployment compensation or lower minimum wages. d. All of the above are consistent with the evidence on unemployment rates.
Over time, the equilibrium price of a gigabyte of computer memory has fallen while the equilibrium quantity purchased has increased. Based on this we can conclude that:
A. decreases in the demand for computer memory have exceeded increases in supply. B. increases in the supply of computer memory have exceeded increases in demand. C. increases in the demand for computer memory have exceeded increases in supply. D. decreases in the supply of computer memory have exceeded increases in demand.
The most important function of the Fed is to
A. provide a system for collecting and clearing checks. B. support the federal government's deficit spending by buying government securities. C. regulate the money supply. D. collect taxes.