What is the trade-off that consumers face when buying the product of a monopolistically competitive firm?
A) Consumers pay higher prices but the products are produced by highly efficient firms.
B) Consumers pay lower prices but have fewer choices.
C) Consumers pay a price greater than marginal cost, but have the luxury of choices more suited to their tastes.
D) Consumers pay higher prices but receive better quality goods compared to the output of perfectly competitive firms.
C
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Structural unemployment refers to unemployment that results from: a. inefficiencies in the market for labor that prolong the job search. b. being in the wrong geographical location
c. the specialization and division of labor. d. seasonal decreases in demand for labor. e. a recession in the economy.
You read a story in the newspaper about the "economies of mass production." This means that
A. fixed cost is less at larger levels of production. B. total cost is less at larger levels of production. C. marginal cost is less at larger levels of production. D. long-run average cost is less at larger levels of production.
Suppose that this graph describes the current labor market for high school teachers:
If the wage is w*, then:
A. there will be a surplus of certified teachers. B. there will be neither a shortage nor a surplus of certified teachers. C. teachers will be underpaid. D. there will be a shortage of certified teachers.
Aggregate demand is reduced by
A. increased government spending. B. reduced taxes. C. decreased interest rates. D. a stronger dollar.