Monopolistically competitive firms have downward-sloping demand curves. In the long run, monopolistically competitive firms earn zero economic profits. These two characteristics imply that in the long run
A) monopolistically competitive markets achieve productive efficiency.
B) monopolistically competitive firms have excess capacity.
C) monopolistically competitive firms earn economic profits.
D) monopolistically competitive markets achieve allocative efficiency.
B
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Jewelry manufacturers produce a range of products such as rings, necklaces, bracelets, and brooches. What fundamental economic question are they addressing by offering this range of items?
A) What to produce? B) Why produce a variety of items? C) Who to produce the items for? D) How to produce goods that consumers want?
On the graph above, unplanned inventory investment is negative at point ________
A) A B) B C) G D) H E) none of the above
The divergence between money costs and opportunity costs will be greatest in which of the following situations?
a. A university purchases 100 computers. b. A university employs people from town in the commissary (people prefer this job to working in the paper factory). c. A university employs otherwise unemployed teenagers to paint crosswalks and curbs. d. A university replaces the roof of the fine arts building.
Points A, B, and C in Figure 2-8 indicate consumption and investment for three economies. Other things constant, which of the economies is likely to grow more rapidly in the future?
a. economy A b. economy B c. economy C d. They would all be expected to grow at the same rate.