In monopolistic competition, a firm
A. Uses nonprice competition.
B. Uses marginal cost pricing.
C. Has no market power.
D. Faces a horizontal demand curve.
Answer: A
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Jane is currently developing a model to explain the national unemployment rate. This is an example of
A) a microeconomic topic. B) normative analysis. C) positive analysis. D) how people act in an irrational manner.
Refer to the graph shown. In the graph, an inflationary gap exists if the price level is:
A. P0 and the aggregate demand curve is AD0. B. P1 and the aggregate demand curve is AD0. C. P1 and the aggregate demand curve is AD1. D. P0 and the aggregate demand curve is AD1.
Suppose that a country is producing on its PPC at a point to the left of the tangency between the trade line and the PPC. At the production point,
A) the opportunity cost in production of the good on the horizontal axis is less than its trade price. B) the opportunity cost in production of the good on the horizontal axis is more than its trade price. C) the opportunity cost in production of the good on the vertical axis is less than its trade price. D) the opportunity cost in production of the good on the horizontal axis may be either less than or more than its trade price. E) the opportunity cost in production of the good on the vertical axis equals its trade price.
The higher the level of inflation, the stronger the impact of reductions in the personal income tax on real GDP
a. True b. False Indicate whether the statement is true or false