The demand for a monopolistically competitive firm's product is
A. perfectly elastic.
B. more elastic than for a monopoly.
C. more inelastic than for a monopoly.
D. perfectly inelastic.
Answer: B
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What important lesson did American economists learn in the 1980s and again in 2001–2003?
A. Large tax cuts can lead to a balance of trade surplus. B. Large government budget deficits can crowd out consumption. C. Large government budget deficits can bankrupt the nation. D. Large government budget deficits can crowd out net exports.
The main source of conflict between employers and their organized workers is over the
(a) disparities in the wages and benefits between organized and unorganized labor. (b) disparities in the wages and benefits between employers and organized workers. (c) proceeds of selling goods and services made jointly between hired labor and business owners. (d) working conditions.
Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. What is the opportunity cost of producing coffee in Chile?
a. Half a pound of sugar b. Two-fifth of a pound of sugar c. 2 pounds of sugar d. One-third of a pound of sugar e. 4 pounds of sugar
Under a floating exchange-rate regime
A. monetary policy must be used to manage the exchange rate. B. the changes in the exchange rate can take care of external balance, leaving macroeconomic policy to take care of internal balance. C. only fiscal policy should be used to reconcile the goals of internal and external balance. D. deficits and surpluses in the official settlements balance will be the primary concern of policy makers.