Product differentiation
a. refers to the attempt of firms to make their goods look like those of the other firms in the industry
b. refers to the attempt of firms to make essentially substitutable goods look different in the minds of the consumers
c. refers to the advantage big firms have in research and development
d. is a common characteristic of a perfectly competitive market structure
e. is only employed in a monopoly market structure
B
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
All of the following are conditions which are favorable to the formation of cartels except
A) the existence of a small number of firms. B) geographic proximity of firms. C) homogeneity of the product. D) easy entry into the industry.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
The economic system that is generally considered to be the most efficient at answering the What to produce and the How to produce questions is the:
A. market economy. B. command economy C. soviet economy. D. traditional economy.