Which assumption is part of the model of monopolistic competition?
A. There is no collusion among firms.
B. There are few buyers and sellers.
C. There are significant barriers to entry into the market.
D. Firms make identical products.
Answer: A
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Refer to Figure 13-1. Ceteris paribus, an increase in households' expectations of their future income would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
The paradox of thrift says that the more people try to save, the more
a. income rises, causing saving to rise more than intended b. consumption falls, causing saving to rise by more than intended c. consumption rises, causing saving to fall d. income falls, causing saving to remain unchanged or even fall e. income rises, causing saving to fall
Other things constant, which of the following will most likely cause the dollar to appreciate on the exchange rate market?
a. higher interest rates in the United States b. a relatively low rate of inflation in the United States c. high rates of income growth in Europe d. all of the above
Which of the following could explain an increase in the equilibrium interest rate and a decrease in the equilibrium quantity of loanable funds?
a. The demand for loanable funds shifted right. b. The demand for loanable funds shifted left. c. The supply of loanable funds shifted right. d. The supply of loanable funds shifted left.