Which of the following is not a characteristic of monopolistic competition?
A) There are many buyers and sellers.
B) There are low barriers to entry.
C) Average revenue is equal to price.
D) The products sold by all firms are identical.
Answer: D
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Which of the following is an example of an ad valorem tax?
A) 5% of price. B) 5% of quantity sold. C) $0.50 per unit sold. D) Government regulation.
When the U.S. price level falls, the open economy effect indicates that
A) U.S. imports will rise. B) U.S. residents will move away from domestic goods and buy more foreign goods. C) U.S. exports will increase. D) foreigners will buy fewer U.S. goods.
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Explanations for the high precautionary savings in China includes all of these except:
A. lifetime employment and guaranteed state pensions. B. China's limited social safety net provides most people with little protection against health problems and medical costs. C. higher prices for things such as housing and education. D. the many uncertainties associated with changing economic institution and society as a whole.