As price decreases along a downsloping linear demand curve, price elasticity of demand decreases.
Answer the following statement true (T) or false (F)
True
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If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will
A. become less elastic. B. decrease. C. increase. D. not be affected.
If firms in monopolistic competition are earning economic profits, then
A) they can expect to earn the profits indefinitely. B) new rivals enter the industry, and the demand for any seller's good decreases. C) the market demand becomes more inelastic. D) the industry is in long-run equilibrium. E) new rivals enter the industry, and the demand for any seller's good increases.
If the price of the capital intensive product rises more than does the price of the land intensive product, then
A) the relative price of the capital intensive product will fall to some point between the pretrade relative prices. B) demand will shift away from the capital-intensive product, and its production will decrease. C) demand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product. D) the production of the capital-intensive product will decrease, but by less than production of the land-intensive product. E) the country that exports the capital-intensive good will lose its comparative advantage.
When testing joint hypothesis, you can use
A) the F- statistic B) the chi-squared statistic C) either the F-statistic or the chi-square statistic D) none of the above