Monopolistic competition is characterized by
A. a standard, undifferentiated product.
B. a horizontal demand curve faced by all firms.
C. relative ease of entry into the market.
D. persistent long-run economic profits.
Answer: C
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As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in
A) increased opportunity cost of cocoa production. B) decreased opportunity cost of cocoa production. C) no change in production of other goods and services. D) increased production of other goods and services.
Suppose a country has a current account surplus and that there is no intervention by finance ministries or central banks. This current account surplus indicates that the country has
A) a deficit in its capital account. B) a surplus in its capital account. C) the official reserve transactions balance is positive. D) the official reserve transactions balance is negative.
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. Kate is considering whether to play the second game. If Kate only cares about the expected value of the outcome and does not care about risk, she should:
A. not play since she never wins anything. B. play if the cost of playing the game is greater than the expected value of the payoff. C. compare the cost of playing the game with the value of her time. D. play if the cost of playing the game is less than the expected value of the payoff.
Most firms are structured as corporations
Indicate whether the statement is true or false