One way to view the cost structure of monopolistic competition is to say that the cost of product differentiation is equal to
A) the difference between marginal revenue and marginal cost.
B) the difference between the cost of production for a monopolistically competitive firm in an open market and the minimum average total cost.
C) the sum of price and marginal cost.
D) the sum of marginal cost and minimum average cost.
B
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If planned aggregate expenditure is above potential GDP and planned aggregate expenditure equals GDP, then
A) the economy is in an expansion. B) actual inventory investment will be less than planned inventory investment. C) actual inventory investment will be greater than planned inventory investment. D) the economy is at full employment.
Everything else held constant, which of the following does NOT cause aggregate demand to increase?
A) an increase in net exports B) an increase in government spending C) an increase in taxes D) an increase in consumer optimism
One result of a contractionary monetary policy would be
A) a decline in the price level. B) an increase in the money supply. C) an increase in business investment. D) lower interest rates.
Discuss the concept of the globalization of production.
What will be an ideal response?