Which of the following is characteristics is common to both monopoly and monopolistic competition?
A) Ease of entry into the industry.
B) Firms are price setters.
C) A relatively large number of sellers.
D) Long-run economic profit equals 0.
B
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If the percentage change in the quantity demanded of a good is greater than the percentage change in price, price elasticity of demand is:
a. elastic. b. inelastic. c. perfectly inelastic. d. perfectly elastic.
Which of the following will decrease the demand for coffee?
a. the discovery that caffeine can cause heart problems b. an increase in the price of coffee c. an increase in the price of tea, a substitute for coffee d. a decrease in the prices of coffee makers and coffee cups, complements to coffee
The Fed would use a reverse repo when they:
A. forecast a permanent increase in the demand for monetary base. B. forecast a permanent decrease in the demand for monetary base. C. want to temporarily increase the monetary base. D. want to temporarily decrease the monetary base.
Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus.Table 1.2Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)A20NA195 B35 180 C45 150 D50 100NAThe lowest opportunity cost in Table 1.2 for Stealth Bombers is
A. 2 B-1 bombers B. 3 B-1 bombers C. 4 B-1 bombers D. 10 B-1 bombers