The demand curve for a monopolistically competitive firm is
A. more inelastic than for a monopoly firm.
B. more elastic than for a monopoly firm.
C. more elastic than for a perfectly competitive firm.
D. the same elasticity as a perfectly competitive firm.
Answer: B
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The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes $350 per month as the legal maximum rent, the consumer's net gain in surplus equals
A) c - f. B) b - f. C) d - f. D) The answer cannot be determined from the information given.
Structural unemployment will decline if:
a. more seasonal work becomes available. b. the government increases taxes to support more welfare programs. c. consumer spending on new technology decreases. d. computerized job-search systems are improved. e. retrained workers can move to areas where new jobs are available.
Using the figure as a guide, which of the following is FALSE with respect to profit maximization and the monopolist? 
A. Profits are the positive difference between total revenues and total costs. B. A monopolist (like any other firm) will select an output rate at which marginal revenue is equal to marginal cost, at the intersection of the marginal revenue curve and the marginal cost curve. C. The monopolist will produce quantity Qm and charge a price of Pm. D. When compared to a competitive situation, consumers pay a higher price to the monopolist, and consequently are forced to purchase more of a product as price varies directly with quantity demanded.
Discuss the role that companies like Standard & Poor's, Dun & Bradstreet, and Moody's play in solving the problem of adverse selection.
What will be an ideal response?