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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If an increase of $10 billion of investment results in an increase in equilibrium expenditure of $40 billion, the multiplier equals
A) $10 billion ÷ $40 billion = 0.25. B) $40 billion - $10 billion = $30 billion. C) $10 billion × $40 billion = $400 billion. D) $10 billion - $40 billion = -$30 billion. E) $40 billion ÷ $10 billion = 4.
Which of the following is a difference between an oligopoly with homogeneous products and an oligopoly with differentiated products?
A) There are a large number of sellers in an oligopoly with homogeneous products and there are a few sellers in an oligopoly with differentiated products. B) Firms in an oligopoly with homogeneous products earn positive economic profits in equilibrium, while firms in an oligopoly with differentiated products earn zero economic profits. C) There are huge barriers to entry in an oligopoly with homogeneous products, while there are no barriers to entry in an oligopoly with differentiated products. D) Firms in an oligopoly with homogeneous products earn zero economic profits in equilibrium, while firms in an oligopoly with differentiated products earn positive economic profits.
One of the strongest motivations for holding the Bretton Woods Conference was to design new international institutions that would
A) contain communism. B) help countries avoid the mistakes of the 1920s and 1930s. C) provide a collective defense security for Western Europe and North America. D) ensure that world prices were not rising too rapidly. E) create a single currency in Western Europe.
The interest parity condition can be written as
A) R = R - (Ee - E)/E. B) R = R + (Ee - E)/E. C) R = R2 - (Ee - E)/E. D) R = R /(Ee - E). E) R = R + (Ee + E)/E.