Which of the following combinations of characteristics best describes a monopolistically competitive firm?
A. Supplies a small share of the market and sells a product that is undifferentiated from other firms in the market.
B. Supplies a large share of the market and sells a product that is undifferentiated from other firms in the market.
C. Supplies a small share of the market and sells a product that is slightly different than its competitors.
D. Supplies a large share of the market and sells a product that is slightly different than its competitors.
C. Supplies a small share of the market and sells a product that is slightly different than its competitors.
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During the recession of 2007-2009, the U.S. economy was experiencing a decrease in home prices and consumer wealth, a credit crisis in the financial markets, and declining consumer and business confidence
What components of aggregate demand were affected and what was the impact on real output? What were the policy options?
A movement down and to the left along the aggregate supply curve will occur when
a. firms' average markup is stable and a decrease in real GDP causes unit costs to fall b. world oil prices fall, thus decreasing the price level c. a change in fiscal policy causes aggregate expenditure to increase d. firms decide to produce less than before at each price level e. an increase in real GDP causes the price level to fall
A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s) does(do) these transactions raise consumption?
a. the first and the second b. the first but not the second c. the second but not the first d. neither the first nor the second
Why do oligopolists use product development and advertising?
A. They contribute to productive and allocative efficiency in markets. B. They enhance the public good by providing information and new products. C. They create conditions for mutual interdependence and support. D. They are less easily duplicated than price cuts as a competitive strategy.