Figure 11.2Figure 11.2 shows demand and costs for a monopolistically competitive firm. In the long run we expect:
A. the firm's demand curve to shift to the right.
B. the firm's marginal revenue curve to shift to the left.
C. the firm's average cost curve to shift upward.
D. the firm's marginal cost curve to shift downward.
Answer: B
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Do all valuable items have price tags?
A. No, because some valuable items have no opportunity cost. B. Yes, because everything has its price. C. Yes, because price is the measure of opportunity cost. D. No, some have no explicit price on them. E. Yes, because only items that can be sold in markets have value.
Suppose this year Angola borrows $100 million from foreign countries, while it lends $15 million to other countries. Angola definitely is a
A) net borrower. B) net lender. C) creditor nation. D) debtor nation.
An increase in the price of the good measured on the horizontal axis will cause the budget line to:
A. shift outward. B. become steeper. C. become flatter. D. shift inward.
Stockholders of ComfortAir Corporation, an air conditioner and furnace manufacturer, are concerned that the companies executives may take on greater risks than stockholders desire. This example illustrates
a. moral hazard and market risk. b. moral hazard and firm specific risk. c. adverse selection and market risk. d. adverse selection and firm specific risk.