The meaning of interdependence in a monopolistically competitive market is
A. that firms will not take into account the reaction of rival firms.
B. that it is difficult for firms to get together to collude.
C. that price rigging commonly occurs.
D. that products produced by firms will be good substitutes.
Answer: A
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The prediction that workers get additional training only when the rewards from the training are expected to exceed the costs of the training (including the opportunity costs) is based on the:
A. cost-benefit principle. B. principle of comparative advantage. C. principle of diminishing returns to capital. D. scarcity principle.
When federal government expenditures exceed tax receipts, the Treasury must
A) expand the money supply. B) raise taxes. C) reduce spending. D) sell bonds.
Refer to the above figure. The firm is currently producing at Q1. The firm should
A) reduce production. B) leave production as it is. C) increase production. D) shut down.
A house is a private good because it is nonrival and nonexcludable
Indicate whether the statement is true or false