If monopolistically competitive firms are incurring losses, existing firms would
A) reduce their costs.
B) charge higher prices
C) make demand more inelastic.
D) leave the industry.
Ans: D) leave the industry.
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Which of these indicators is probably the most politically sensitive?
A) Housing starts B) Capacity utilization C) Employment D) Car sales
The number of CDs purchased increased by 50 percent when consumer income increased by 10 percent. Assuming other factors are held constant, CDs would be classified as:
a. social goods. b. normal goods. c. Giffen goods. d. inferior goods.
Trent decides to spend an hour playing basketball rather than studying. His opportunity cost is: a. nothing because he enjoys playing basketball more than studying
b. the foregone benefit to his grades from studying for an hour. c. the increase in skill he obtains from playing basketball for that hour. d. nothing because he had a free pass into the sports complex to play basketball.
The sum of consumer surplus and producer surplus is equal to
A) total profit. B) zero. C) the economic surplus. D) the deadweight loss.