All of the following are characteristics of a monopolistically competitive industry EXCEPT
A. many firms.
B. low barriers to entry and exit.
C. sales promotion and advertising.
D. homogeneous products.
Answer: D
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Which of the following conditions holds in an economically efficient competitive market equilibrium?
A) Producer and consumer surplus are exactly equal in size. B) There are no positive and no negative external effects from consumption and production. C) The deadweight loss is positive but at a minimum. D) The marginal benefit of the last unit produced and consumed is maximized.
Refer to the accompanying figure. Suppose the solid line represents the current supply of Star Wars action figures. If the price of the plastic used to make action figures rises, current supply will:
A. shift to S(A). B. not change because a change in the price of plastic will not affect the demand for action figures. C. shift to S(B). D. not change; only the quantity supplied will change.
Which of the following tax cuts lowered the top marginal tax rate to 28 percent?
A. The Kemp-Roth Tax Cut of 1981 B. The Tax Reform Act of 1986 C. The Tax Cut of 1993 D. The Tax Cut of 2001 E. The Tax Cut of 2003
Suppose India wants to measure how much the standard of living has changed over the last decade. Which piece of data should India use?
A) population B) real GDP per person C) real GDP D) wages E) inflation