A monopolistic competitor is like a competitive firm in the long run, because
A) it earns positive economic profits.
B) it earns zero economic profits
C) both firms will earn positive economic profits.
D) both firms will increase price to increase profits.
Answer: B
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Contractionary fiscal policy uses ________ government spending and ________ taxes to increase aggregate economic activity
A) lower; higher B) higher; lower C) higher; higher D) lower; lower
If a monopolist produces to a point at which marginal revenue is more than marginal cost then
A) the firm should increase output. B) the firm should reduce output. C) the firm is maximizing profits. D) we do not know if the firm should increase or reduce without more information.
The price elasticity of supply measures the responsiveness of quantity supplied to a change in ____________.
a. quantity demanded. b. demand c. price. d. supply.
Many economists are in favor of increased immigration of adult foreigners who possess high levels of skills and education. Why?
a. Economists are very caring individuals. b. Economists believe this is a way to increase understanding among different ethnic groups. c. Economists believe foreigners will work cheaper. d. Economists believe this will increase aggregate supply.