What are the most important differences between perfectly competitive markets and monopolistically competitive markets?
What will be an ideal response?
In both perfectly competitive and monopolistically competitive industries there are many firms and low barriers to entry. However, while products are identical in perfectly competitive markets, products are similar—but not identical—in monopolistically competitive markets.
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Which of the following is an example of capital?
A) A cell phone bought by an individual for her younger brother B) A tractor used by a farmer for plowing his field C) A used television set purchased by a family D) Alcoholic beverages served at a corporate event
An increase in the federal budget deficit: a. only occurs when there is a deficit in the balance of trade
b. creates deflation. c. decreases aggregate demand. d. decreases the aggregate quantity demanded along a stationary aggregate demand curve. e. raises the equilibrium level of output and employment.
________: social costs of imperfect competition
Fill in the blank(s) with correct word
Consider a carbon-tax and a cap-and-trade strategy for reducing carbon dioxide and other so-called greenhouse gases. Which of the following statements is true?
a.) A carbon tax and a cap-and-trade system have the same outcomes. b.) Under a cap-and-trade system the firms that polllute the most must clean up the most. c.) A cap-and-trade system improves efficiency by creating scarcity. d.) A carbon tax would reduce consumption and lessen the externalities but is easy to evade.