In a monopolistically competitive market,
a. there are only a few sellers.
b. each firm takes the price of its product as given.
c. firms can enter or exit the market without restrictions.
d. each firm produces a product that is essentially identical to the products of other firms in the market.
c
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Which of the following best illustrates diversification?
a. A company that produces many different products decides to produce fewer. b. After selling stock, corporate management spends funds on projects with greater risks than shareholders had anticipated. c. Instead of holding only the stocks of companies engaged in the banking business, a person decides to hold stock in a number of different companies producing different goods and services. d. A person decides to purchase only stocks that have paid high dividends in the past.
A person who has an absolute advantage in the production of all goods will
A) also have a comparative advantage in the production of all goods. B) not be able to gain from specialization and exchange. C) have a production possibilities frontier with a constant slope. D) have a comparative advantage in the production of some goods but not in the production of others.
Refer to Figure 5-8. Suppose the emissions reduction target is currently established at 8 million tons. Should society undertake to reduce an additional 1 million tons so that the total reduction is 9 million tons?
A) No, because there is a net cost represented by the area B + C. B) Yes, because toxic fumes are dangerous and must be eliminated at any cost. C) No, because the firms will pass the additional cost on to consumers. D) Yes, because the marginal benefit exceeds the marginal cost at 8 million tons.
Florencia has decided to make computer literacy mandatory in high schools. This is expected to bring about a technological growth and cause: a. the long-run aggregate supply curve to shift rightward
b. the long-run aggregate supply curve to shift leftward. c. an upward movement along the long-run aggregate supply curve. d. a downward movement along the long-run aggregate supply curve.