Nonprice competition in monopolistically competitive markets results in
A. consumers buying the product with the lowest price in a differentiated market.
B. less advertising and product differentiation than in markets without nonprice competition.
C. rivalry among competing firms based on the characteristics that differentiate their products.
D. price equaling the minimum average total cost in long run equilibrium.
Answer: C
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Assuming a reserve ratio of 10 percent, if a bank sells $100,000 in securities how much can the bank loan out?
A) $90,000 B) $100,000 C) $110,000 D) $10,000
Government spending programs that create jobs are often popular because
A) when spending programs are funded by the government there are no secondary effects. B) if a spending program is approved by Congress, it means that the value of what is produced is greater than the value of the resources used to produce it. C) the benefits of job creation are always greater than the costs. Jobs are the key to economic progress. D) the created jobs are highly visible, while the secondary effects of lost jobs in other areas, higher interest rates, and higher future taxes are less visible.
Supply refers to the amount of a product that a producer will offer in the market at some particular price.
Answer the following statement true (T) or false (F)
Answer the following statement(s) true (T) or false (F)
1. A parallel shift in the budget line is caused by changes in the relative prices of the two goods. 2. Parallel shifts in the budget line are considered when deriving the demand curve for a good. 3. An Engel curve shows the relationship between price and quantity demanded. 4. Normal goods have upward-sloping Engel curves. 5. If an Engel curve is downward sloping, then one of the two goods must be inferior.