Monopolistically competitive firms do not differentiate their products by:
A. selling products at different locations.
B. selling a product with different levels of services accompanying the product.
C. convincing consumers that the product is identical to those sold by competitors.
D. using advertising to create a special aura or image for the product.
Answer: C
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Destabilizing speculation refers to
A) actions taken by the International Monetary Fund that increase lending to countries who have pegged their currencies against the dollar. B) any depreciation of a country's currency as a result of long-run adjustments to purchasing power parity. C) actions taken by investors who sell a country's currency in anticipation of buying it back later at a lower price. D) actions taken by currency traders to sell a currency that is undervalued.
A nation's market-risk premium rises if:
a. The volatility (e.g., standard deviation) of expected inflation rises. b. The average expected inflation rate rises. c. Security maturities lengthen. d. All of the above.
Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marginal revenue to __________ and their profit maximizing level of output to __________.
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Which of the following is TRUE?
A. Price discrimination guarantees that the monopolist will make a profit. B. Price discrimination occurs when there are differences in prices that reflect differences in marginal cost. C. Monopoly results in a higher quantity of output being sold compared with perfect competition. D. Charging all customers the same price when costs vary can actually be a case of price discrimination.