Which of the following will not generally be true of a monopolistic competitor operating in the long run?
a. marginal cost exceeds average total cost
b. marginal revenue = marginal cost
c. production in the range of economies of scale
d. price greater than marginal revenue
a
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Vertical contracts between manufacturers and retailers often aim to
a. Serve as a "signal" of the manufacturer's belief of the likely success of his product b. Reward the retailer for undertaking the risk inherent in introducing a new product c. Reimburse the retailer for the cost of managing an extended inventory d. All of the above
Which of the following is an example of opportunity cost not measured by money cost?
a. the time spent eating a business lunch at a restaurant b. the time spent preparing a meal eaten at home c. the time spent studying to obtain an "A" in economics d. the time spent repairing a car in one's own garage e. All of the above are correct.
What claim is made by the Ricardian Equivalence Theorem? Why must it hold in a simple economy? If it fails to hold for our economy, what do economists expect the reason(s) may be?
What will be an ideal response?
If a country has a collapsing currency due to large budget deficits financed by monetary expansion, the cure is to
A) default on sovereign debt and restructure the economy. B) peg the currency to something different. C) cut the deficit and raise interest rates. D) increase the rate of inflation to reduce the real value of government debt.