Which of the following statements is FALSE concerning monopolistic competition?
A) There are many firms.
B) Firms sell a differentiated product.
C) Each firm's actions influence rival firms.
D) Firms are free to enter and exit.
C
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Aggregate demand will be affected by the purchasing power of money
Indicate whether the statement is true or false
A Consumer Price Index (CPI) adjustment overcompensates for inflation because it ignores
A) the income effect when relative prices change. B) the substitution effect when relative prices change. C) that some goods are inferior. D) that the substitution effect may offset the income effect.
The slope of the isocost line tells the firm how much
A) capital must be reduced to keep total cost constant when hiring one more unit of labor. B) capital must be increased to keep total cost constant when hiring one more unit of labor. C) more expensive a unit of capital costs relative to a unit of labor. D) the isocost curve will shift outward if the firm wishes to produce more.
Research supports the claim that there are significant compliance costs associated with environmentally friendly production in countries with strong environmental laws, so that there are large incentives for firms to produce in countries with lax environmental laws.
Answer the following statement true (T) or false (F)