In monopolistic competition, product differentiation causes
a. the firms to earn economic profits in the long run
b. a horizontal demand curve for each firm's output
c. the firms to operate with excess capacity
d. significant barriers to entry
e. high concentration ratios
C
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A firm raises the price it charges. The firm's total revenue does not change. What can we conclude about the price elasticity of demand?
A) Demand is elastic. B) Demand is unit elastic. C) Demand is inelastic. D) Demand is perfectly elastic. E) Not enough information is given to conclude anything about price elasticity of demand.
Which of the following is an example of money functioning as a medium of exchange?
A) Walmart accepting your $20 when you buy a Blu-ray. B) Apple pricing an iPhone at $299. C) Bank of America paying you 3 percent on your saving account. D) You saving your spare change in a jar before depositing them in your savings account.
In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Which of the following statements about comparative advantage is CORRECT?
A) Brandon has a comparative advantage in both plowing and planting. B) Brandon has a comparative advantage only in plowing. C) Brandon has a comparative advantage only in planting. D) Christopher has a comparative advantage in both plowing and planting.
Alan is offered a gamble. Heads he wins $100, tails he wins $20 . If the game costs $60, would he play?
a. Yes he would play since the expected value is equal to the price of the play b. Yes he would play since the expected value of the play is higher than the price of the play c. No he would not play since the price of the play is higher than the expected value d. No he would not play since this is a fair bet and he is not being offered any risk premium