Which of the following describes differentiated products?
a. They have close substitutes in the market
b. They cater to the needs of only the lower-income section of the population.
c. The prices and quantities of such products are set by the government.
d. The supply of such products is independent of the market price.
a
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A competitive market with no externalities is efficient when it is in equilibrium because
A) total benefit equals total cost. B) marginal benefit equals marginal cost. C) consumer surplus equals producer surplus. D) the sum of consumer surplus plus producer surplus is minimized. E) the deadweight gain equals its maximum.
Banks can make loans as long as they have
A) deposits. B) reserves. C) required reserves. D) excess reserves. E) excess government securities.
Primarily, macroeconomists use microeconomic principles to study
A) business cycles and trends in the stock market. B) long-run economic growth and antitrust policies. C) trends in the stock market and long-term economic growth. D) long-run economic growth and business cycles.
If firms in a monopolistically competitive market are earning economic profits, which of the following scenarios best reflects the change a representative firm experiences as the market adjusts to its long-run equilibrium?
A) Demand decreases and becomes less elastic. B) Demand decreases and becomes more elastic. C) Demand increases and becomes less elastic. D) Demand increases and becomes more elastic.