Total fixed cost falls as output expands.
Answer the following statement true (T) or false (F)
False
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In what way is monopolistic competition superior to perfect competition?
a. The cost of producing the industry's output is lower in monopolistic competition. b. Consumers benefit from having differentiated products instead of identical products. c. Long-run profits are higher in monopolistic competition than in pure competition. d. In monopolistic competition, firms can fully exploit any existing economies of scale.
In Figure 5-7, budget line B compared to A clearly shows that the
A. price of wine increased. B. price of beer decreased. C. price of beer increased. D. consumers’ money income increased.
An increase in the wage rate ______
A. shifts the average total cost curve and the marginal cost curve upward B. shifts the average fixed cost and average variable cost curve upward C. increases average variable cost but does not change marginal cost D. does not change average variable cost but increases average total cost
The government's role in a developing country is important during the country's development process for all of the following reasons except
A. many social projects are associated with the free-rider problem, which minimizes the rate of return to the private sector. B. building infrastructure is a huge project that only the government can undertake. C. the government is the only institution with a vested interest in a country's development. D. building social overhead capital cannot successfully be taken on by the private sector.