In a certain monopolistically competitive market that is characterized by high prices and equally high-quality merchandise, if a firm's competitors begin to successfully introduce new products that cut into the firm's market share, the firm's best counter-strategy is to:
a. raise prices in order to increase the revenue.
b. introduce few new products in order to meet competitors head on.
c. reduce its advertising budget in order to save costs.
d. ignore its competitors and hope its customers' loyalty carry it through the threat.
e. look to the government for protection.
b
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The magnitude of the tax multiplier is ________ the magnitude of the government expenditure multiplier
A) greater than B) equal to C) smaller than D) the inverse of E) exactly one half
When property rights are clearly defined, there is generally a
A) law that must be passed to ensure fairness. B) regulatory agency that handles externalities. C) common property problem. D) voluntary agreement that can be reached.
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. If the market maker bought and sold at the equilibrium price, what is his profit
a. $1 b. $2.5 c. $3 d. $0
Wage elasticity of labor supply is a term referring to the
a. percentage change in wages demanded divided by the percentage change in wages supplied. b. percentage change in wages supplied divided by the percentage change in wages demanded. c. percentage change in wages divided by the percentage change in hours worked. d. percentage change in hours worked divided by the percentage change in wages.