New firms are able to enter monopolistically competitive markets because there are low barriers to entry
Indicate whether the statement is true or false
TRUE
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. 
If Quick Buck and Pushy Sales decide to collude and work together as a monopolist, then together they should produce ________ units per month and charge ________ per unit.
A. 4,000; $2 B. 3,000; $1 C. 1,000; $3 D. 2,000; $2
The classical model uses the assumption that
A) all wages and prices are flexible. B) interest rates are not flexible. C) monopoly is widespread in the economy. D) economic markets are fragile and have no tendency to move towards an equilibrium.
________ gross domestic product is the value of ________ linked back to the prices of a single year
A) Real; total production B) Real; production possibilities C) Productivity; the consumer price index D) Nominal; total production