What is the main difference between monopolistic competition and monopolies?
What will be an ideal response?
The main difference is that under monopolistic competition there are available substitutes and there is competition whereas under monopoly there aren't available substitutes and there are no competitors. Also, there are barriers to entry in monopoly, but no barriers to entry in monopolistic competition.
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If the income elasticity of demand for a good is 0.5, then
a. it is a normal good, and its demand curve will shift to the left if buyers' incomes increase b. it is a normal good, and its demand curve will shift to the right if buyers' incomes increase c. it is an inferior good, and its demand curve will shift to the right if buyers' incomes increase d. it is an inferior good, and its demand curve will shift to the left if buyers' incomes increase e. there is insufficient information to determine whether the good is normal or inferior
In the quantity equation MV = PT, V is the:
A. income velocity of money. B. transactions velocity of money. C. inflation rate. D. value of the money supply.
In the RBC model, supply shocks
A) are always favorable by definition, but come at irregular intervals. B) are always adverse by definition, but come at irregular intervals. C) alternate between favorable and adverse shocks. D) follow demand shocks with the opposite effect on output.
An increase in the stock of capital: a. causes a movement from a point on an economy's production possibilities curve to a point inside the curve. b. causes an economy's production possibilities curve to shift inward over time
c. causes an economy's production possibilities curve to shift outward over time. d. has no effect on the position of an economy's production possibilities curve over time.