Monopolistically competitive firms have excess capacity. To maximize profits, firms will
a. increase their output to lower their average total cost of production and eliminate the excess capacity.
b. produce where price equals marginal cost to eliminate the excess capacity.
c. produce where average revenue equals marginal cost to eliminate the excess capacity.
d. maintain the excess capacity.
d
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Economic theory in general, and trade theory in particular are replete with equivalencies
For example, it is argued that for any specific tariff one can find an equivalent ad valorem tariff; and that for any quota one can calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorem tariff are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.
Residential construction is generally included in which category of GDP?
a. consumption b. investment c. government expenditures d. net exports
According to the data on real U.S. GDP,
a. economic growth has been irregular, with periodic downturns. b. economic growth has been consistent, with few downturns. c. economic growth has been extremely rapid, but with major collapses. d. economic growth has been elusive, but downturns have been eliminated.
The percentage change in one's real income can be approximated by:
A. the percentage change in price level minus the percentage change in nominal income. B. the percentage change in nominal income minus the percentage change in the price level. C. dividing the price level, expressed as an index number, by nominal income. D. dividing real income by the price level, expressed as an index number.