A monopolistically competitive firm faces a downward-sloping demand curve because
A) it is able to control price and quantity demanded.
B) there are few substitutes for its product.
C) of product differentiation.
D) its market decisions are affected by the decisions of its rivals.
Answer: C
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A normative economic statement is:
a. a statement of fact. b. a statement of opinion which advocates a particular position. c. not acceptable in the economics profession. d. the only acceptable manner to present economic information. e. a statement based upon government-supplied information.
Suppose John and Wayne are the only two demanders of cowboy movies. Each month, John buys six cowboy movies when the price is $10 each, and he buys four cowboy movies when the price is $15 each. Each month, Wayne buys four cowboy movies when the price is $10 each, and he buys two cowboy movies when the price is $15 each. Which of the following points is on the market demand curve?
a. quantity demanded = 2; price = $15 b. quantity demanded = 4; price = $25 c. quantity demanded = 10; price = $10 d. quantity demanded = 16; price = $25
Efficient markets theory suggests that purchasing the published reports of financial analysts
A. is not likely to increase financial returns. B. is likely to increase one's returns by an average of 5 percent. C. will increase financial returns in the first year but not in following years. D. is likely to increase one's returns by an average of about 3 to 5 percent.
________ demonstrates that an optimal (or most efficient) level of output exists for every public good.
A. The Tiebout hypothesis B. Samuelson's theory of public expenditure C. The Coase theorem D. The Theory of Public Choice