If firms in a monopolistically competitive industry are making economic profits:
a. firms will likely be subject to regulation.
b. barriers to entry will be strengthened
c. new firms will enter the market.
d. some firms must exit the market.
c
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The Fed is a central bank and as such
A) does business only with the federal government. B) provides banking services to banks but not individuals. C) provides banking services to individuals and firms. D) does business with international organizations such as the United Nations. E) is where the Federal Government turns when it needs to borrow.
Because there are low barriers to entry in a monopolistically competitive market
A. they produce a homogeneous product. B. the firms are price takers. C. there is no non-price competition. D. there are many firms in the industry.
The Bank of Red Oak has $2 million in deposits and $400,000 in reserves. If excess reserves are equal to $100,000, the required reserve ratio is
A. 5%. B. 10%. C. 15%. D. 20%.
As a firm produces more and more DVDs, the average cost of producing each DVD falls. A curve showing the behavior of the average cost of a DVD as more DVDs are produced
A) would be positively and then negatively sloped. B) would be positively sloped. C) would be horizontal. D) would be negatively sloped.