In monopolistic competition, a firm's demand curve is tangent to the ATC curve in the long run because
A. Entry eliminates economic profit, and exit eliminates losses.
B. Barriers to entry are high.
C. Advertising is ineffective in differentiating the product.
D. Producers are price takers.
Answer: A
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International influences have become relatively ________ important for the U.S. economy in recent decades, as we become a more ________ economy
A) less, "open" B) less, "closed" C) more, "open" D) more, "closed"
The total amount of income in a society is independent of how income is distributed
a. True b. False Indicate whether the statement is true or false
Which of the following correctly describes the difference between aggregate output and aggregate demand?
a. Aggregate output is the relationship between the average price level and the quantity of all goods and services demanded, while aggregate demand is the total quantity of goods and services produced in the economy during a given time period, with other things constant. b. Aggregate output is the total quantity of goods and services produced in the economy during a given time period, while aggregate demand is the relationship between the average price level and aggregate output demanded, with other things constant. c. Aggregate output is that portion of the total quantity of goods and services sold through export sales, while aggregate demand is the remaining portion of the total quantity of goods and services sold domestically. d. Aggregate output is the total quantity of goods and services imported in to the economy during a given time period, while aggregate demand is the relationship between the general price level and aggregate output demanded, with other things constant.
You observed last week that the price of tomatillos was $4 per pound and that the total quantity of tomatillos consumed in Ames was 50 pounds. This week, you observe that the price of tomatillos increased to $6 per pound and the consumption decreased to 30 pounds. Based on your observations, calculate the elasticity of demand for tomatillos.
A. -2 B. -1.6 C. -0.8 D. -0.5