What is product differentiation? What market structure is characterized by product differentiation?
What will be an ideal response?
A firm practices product differentiation if it makes a product that is slightly different from the products of competing firms. A differentiated product has close substitutes, but not perfect substitutes. Product differentiation is a distinguishing feature of monopolistic competition.
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When the government steps in to help determine prices, it is called
a. price ceilings. b. price floors. c. equilibrium prices. d. price control.
Figure 10-2
Figure 10-2 shows demand and short-run cost curves for a perfectly competitive firm. At its profit-maximizing level of output, the firm's short-run TC is represented by area
a.
ADFO.
b.
BGHC.
c.
BGIO.
d.
ADGIO.
"Crowding out" is the theory that an increase in our federal government's budget deficit will likely:
A. decrease the national debt. B. decrease interest rates. C. decrease borrowing by households and businesses D. increase the impact of the spending multiplier.
Answer the following statement true (T) or false (F)
1) Property rights over fish in the open ocean exist once the fish are caught. 2) Fisheries have been overexploited relative to forests primarily because people care more about trees than fish. 3) TAC policies help reduce overfishing and reduce costs for fishers. 4) Total allowable catch policies promote economic efficiency better than individual transferable quotas.