Refer to the given market-for-money diagrams. The asset demand for money is shown by:
A. D 1 .
B. D 2 .
C. D 3 .
D. S.
B. D 2 .
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In the long run, firms in monopolistic competition earn zero economic profit. When firms earn zero economic profit, in the long run they exit the industry
A) The first sentence is correct and the second sentence is incorrect. B) The first sentence is incorrect and the second sentence is correct. C) Both sentences are correct. D) Both sentences are incorrect. E) More information about the presence or absence of barriers to entry and exit is needed to determine if the statements are true or false.
All possible gains from specialization and exchange would be fully exploited only under which market structure?
A) Pure monopoly B) Perfect competition C) Oligopoly D) Structures allowing for price-searching activity E) Structures where entry is restricted
Sally is allocating her budget between two goods, A and B. If Sally has used up the budget on a combination of A and B for which MUA/PA exceeds MUB/PB, she can increase total utility by buying
a. more A and less B b. more B and less A c. more A without changing her consumption of B d. less B without changing her consumption of A e. more B and more A
Explain the significance of voting with suitable examples