In which of the following ways is a monopolistically competitive firm like a perfectly competitive firm?
A. Short-run economic profits are always positive.
B. Short-run economic profits may be positive, negative, or zero.
C. Long-run economic profits are negative.
D. Long-run economic profits are positive.
Answer: B
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Suppose that when one person consumes a good, it is possible to provide it to others at no additional cost. Such a good is called
a. nonexcludable. b. nonrivalrous. c. a free good. d. a Clarke good.
A characteristic common in both oligopoly and monopolistic competition is:
A) a small number of firms compete in the market. B) natural or legal barriers prevent the entry of new firms into the market. C) each firm faces a downward-sloping demand curve. D) the firms in the market are interdependent. E) each firm has a large share of the market.
It is widely believed that the Federal Reserve's most important function is
A) to provide loans to the federal government. B) to regulate the money supply. C) to set the legal, controlled consumer interest rates. D) to lend to risky customers.
Which of the following is most likely to influence a household’s level of consumption?
a. total investment spending b. government spending c. amount of disposable income d. ratio of exports to imports