In a monopolistically competitive scenario, as more firms enter into the industry, the long run demand curve for most firms will tend to become:
a. more inelastic.
b. vertical
c. horizontal.
d. more elastic.
d
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An individual is structurally unemployed if
A) there is a recession and the individual is laid off. B) the individual wants to work just during certain months of the year. C) the individual quits a job in order to search for a better one. D) the individual lacks marketable job skills because technology has changed.
In events leading to the collapse of the housing bubble, inflated home values created a:
A. wealthier economy, which caused economic growth. B. false sense of wealth, which increased aggregate demand. C. false sense of wealth, which spurred economic growth to decrease. D. wealthier economy, which caused inflation.
During its run on Broadway, the play The Producers regularly sold out all available tickets at the St. James Theater. The theater could have raised ticket prices from $75 to $125 and still sold all available tickets but chose not to do so. The best
explanation for this decision is A) theater owners are unaware of the elasticity of demand for Broadway shows. B) theater owners do not want to raise their prices on weekends, when demand is high, and then have to lower prices during the week, when demand is lower. C) firms sometimes give up profits in the short run to keep their customers happy and increase their profits in the long run. D) theater owners are not motivated to maximize their profits.
If there are increasing returns to scale, then it makes sense to consolidate operations into one production facility
A) if production above domestic demand can be exported. B) only if the consolidation creates an absolute advantage versus other trading partners. C) if the government subsidizes production. D) Never, because then you lose the possibility of comparative advantage gains between the production facilities.