How do consumers benefit from trade among monopolistically competitive firms?
a. Prices are the same as in autarky, but the wider choice of goods increases consumer surplus.
b. Consumer surplus increases because prices are lower than in autarky, and there is a wider choice of goods.
c. Prices are higher than in autarky, but the wider choice of goods increases consumer surplus.
d. The government provides cash subsidies to consumers
Ans: b. Consumer surplus increases because prices are lower than in autarky, and there is a wider choice of goods.
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The World View "Rebounding Oil Price Spurs More Rigs" related to oil prices and oil rigs suggests.
A. Oil rigs have found new supplies of oil, indicating that the demand for oil is inelastic. B. As the price of oil rises, the quantity supplied falls. C. As the price of oil increases, there is an increase in oil rigs and thus the amount of quantity supplied, indicating that supply is elastic. D. Oil rigs around the world have had difficulty finding additional sources of oil, indicating that the elasticity of supply is inelastic.
The certainty equivalent of a gamble is negative when tastes are risk loving.
Answer the following statement true (T) or false (F)
The demand for money curve shifts rightward if
A) the price level increases. B) real GDP increases. C) the nominal interest rate increases. D) the real interest rate decreases.
Monetizing the debt occurs when ________
A) government securities are issued B) government securities are sold by the central bank C) government securities are bought by the central bank D) tax revenues fall short of government expenditures