Given the characteristics: (1) many buyers and sellers, (2) free entry and exit, (3) perfect information, and (4) heterogeneity of products, monopolistic competition and perfect competition share
a. (1) and (4).
b. (1), (2), and (3).
c. (2) and (4).
d. (2), (3), and (4).
b
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Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is ________
A) 1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible B) 2 rides per day C) 4 rides per day D) 6 rides per day because that is the maximum number of rides
Last year due to the increased rainfall there was a plentiful supply of blueberries which caused their price to drop. Bakeries regularly produce and sell blueberry pie. Considering the market for blueberry pies, what factor of supply has been affected, and what was the overall effect on the supply?
A. The price of an input has been affected; supply will increase. B. The price of an input has been affected; supply will decrease. C. The new technology has been affected; supply will increase. D. The number of sellers has been affected; supply will increase.
A new hormone will increase the amount of milk each cow produces. If this hormone is adopted by many dairies, what will be the effect on the milk market?
a. An increase in supply, higher equilibrium price, and lower equilibrium quantity. b. A decrease in supply, lower equilibrium price, and lower equilibrium quantity. c. An increase in supply, lower equilibrium price, and higher equilibrium quantity. d. An increase in supply, higher equilibrium price, and higher equilibrium quantity. e. A decrease in supply, lower equilibrium price, and higher equilibrium quantity.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.