Some economists argue that monopolistically competitive markets are inefficient because:
A. the firms earn economic profits in the long run.
B. the firms' marginal costs and marginal revenues are not always equal.
C. firms do not produce the output rate that would minimize their average total cost.
D. barriers to entry are high.
Answer: C
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In the figure above, the shift from the short-run Phillips curve SRPC0 and the long-run Phillips curve LRPC0 to the short-run Phillips curve SRPC2 and the long-run Phillips curve LRPC2 is the result of ________ in the expected inflation rate and
________ in the natural unemployment rate. A) a decrease; a decrease B) an increase; an increase C) no change; a decrease D) an increase; no change E) a decrease; an increase
Suppose you are covered under health insurance or belong to a Health Maintenance Organization (HMO), and you are insured against all or most of the costs of visits to the doctor. As a result you are likely to make greater use of medical services of all kinds. This tendency of people with insurance to change their behavior in a way that leads to more claims against the insurance company is called
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A. the market demand increased for corn. B. the market demand decreased for corn. C. firms exited the market. D. Sheila's costs have increased.