In the short run, monopolistically competitive firms will maximize profits by:
A. acting like perfectly competitive firms.
B. acting like monopolists.
C. playing strategic games like oligopolists.
D. None of these statements is true.
B. acting like monopolists.
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The predominant form of household debt is
A) consumer installment debt. B) collateralized debt. C) unsecured debt. D) unrestricted debt.
Monopolistic and perfect competition are alike in that: a. a firm's long-run equilibrium output is located where long-run average total cost is increasing. b. a firm's long-run equilibrium output is located where long-run average total cost is minimized. c. firms earn a normal rate of return in the long run
d. firms are price takers.
If the average income of the consumers of Good A increased from $400 to $440, and the quantity demanded of Good A increased from 1,200 units to 1,300 units, then the income elasticity of demand for Good A is equal to:
a. 1.65. b. 1.16. c. 0.35. d. 0.84.
The new classical view of fiscal policy holds that
a. budget deficits will stimulate consumption. b. budget deficits will decrease the saving rate. c. individuals fail to recognize that debt-financing implies higher future taxes. d. individuals fully anticipate the added tax liability implied by the debt financing and will increase their saving so they can meet this obligation.