A perfectly competitive firm and a monopolistically competitive firm are similar in each of the following respects except
A. each has many buyers and sellers.
B. firms sell homogeneous products in both markets.
C. in having perfect information.
D. for freedom of exit and entry.
Answer: B
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You consume only steak and lobster. Your substitution effect from a drop in the price of lobster is measured by a movement along your indifference curve between steak and lobster
Indicate whether the statement is true or false
If the U.S. government increases its expenditures (without any change in taxes) and at the same time the Federal Reserve Bank increases the money supply, the AD curve would:
A. become steeper. B. shift to the left. C. become flatter. D. shift to the right.
The LM curve will shift to the right, if there is a(n):
A) decrease in money supply. B) increase in real money demand. C) increase in money supply. D) increase in output.
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
According to the graph shown, if the economy is operating under free trade, who would be opposed to a tariff?
A. Domestic producers B. Domestic consumers C. Foreign producers D. Both A and B would be opposed to a tariff.