A monopolistic competitor behaving in a profit-maximizing way will
A) not advertise.
B) advertise as much as it can in order to increase its sales.
C) advertise to the point where the additional sales from advertising equal the additional marginal costs of the product.
D) advertise to the point where the additional revenue from one more dollar of advertising just equals the extra dollar cost of advertising.
Answer: D
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The longer the time period considered, the elasticity of supply tends to: a. decrease
b. remain constant. c. increase. d. converge to zero.
A tax is imposed on orange juice. Consumers will bear more of the burden of the tax: a. If the demand for orange juice is relatively inelastic and the supply is relatively elastic. b. If the demand for orange juice is relatively elastic and the supply is relatively inelastic. c. If the supply for orange juice is perfectly inelastic
d. none of the above
You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC: 
If you offer to give the other island 1 coconut for every 4 fish they give you, then they will:
A. refuse your offer because they can produce as many coconuts as you can. B. accept your offer because their opportunity cost of a coconut is greater than 4 fish. C. accept your offer because your opportunity cost of a coconuts is less than 4 fish. D. refuse your offer because they have a comparative advantage in fish.
Some nations use a currency board to manage their currencies. How does this work?
a. It is all in the hands of international banks. b. The International Monetary Fund manages the currency. c. There is a fixed rate regime with a set of strict rules and policy guidelines to keep the currency's value stable. d. The currency is allowed to float, but its fluctuations are reviewed periodically by a board of economists.