Price exceeds marginal cost for a monopolistically competitive firm in long-run equilibrium because:
A. demand is perfectly elastic.
B. economic profits are negative.
C. economic profits are positive.
D. demand is not perfectly elastic.
Answer: D
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As firms reduce their stock of capital, labor demand ________ and labor supply ________
A) decreases; stays the same B) decreases; decreases C) increases; stays the same D) increases; increases
Wendy spends $30 a week on movies and magazines. The price of a movie is $8, the price of a magazine is $2, and Wendy sees 3 movies a week and buys 3 magazines
The price of a magazine now increases to $4 and Wendy's brother gives her $6 a week so that she can still see 3 movies a week and buy 3 magazines. In this situation, Wendy will see ________ movies and buy ________ magazines. A) 3; 3 B) less than 3; less than 3 C) more than 3; fewer than 3 D) less than 3; more than 3
Higher interest rates tend to increase the demand for money.
a. true b. false
A demand curve for a normal good
A. is constructed based on the assumption that income is rising. B. shows the inverse relationship between price and quantity demanded. C. slopes upward and to the right. D. is constructed based on the assumption that an inverse relationship exists between price and income.