A good example of a monopolistic competitive industry is
A. the restaurant industry.
B. the local cable industry.
C. the public utility industry.
D. diamond mining.
Answer: A
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An externality is defined as
a. the revenue generated by a firm in the external market b. a byproduct of a good or activity that affects someone not immediately involved in the transaction c. an additional cost of consumption that is borne by a third party d. a cost or benefit arising from price changes e. the value of a good or service to a consumer
Higher inflation results in
a. more frequent price changes and increased variability of relative prices. b. more frequent price changes and decreased variability of relative prices. c. less frequent price changes and increased variability of relative prices. d. less frequent price changes and decreased variability of relative prices.
Macroeconomics is best described as the study of
A. the relationship between inflation and wage inequality. B. the nation's economy as a whole. C. very large issues. D. the choices made by individual households, firms, and governments.
Perfect competition is socially efficient and monopoly is not because under perfect competition price is ________ while under monopoly price is ________.
A. equal to MR; less than MR B. less than MR; equal to MR C. equal to MC; less than MC D. equal to MC; greater than MC