As compared to a perfectly competitive firm, a monopolistically competitive firm will:
A. have more control over price.
B. have less control over price.
C. face more barriers to entry.
D. face many more competitors.
Answer: A
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Refer to Figure 24-2. Ceteris paribus, an increase in the expected future price level would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
When market conditions in a competitive industry are such that firms cannot cover their total production costs, then
a. the firms will suffer long-run economic losses. b. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits. c. some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs. d. all firms will go out of business, since consumers will not pay prices that enable firms to cover their total production costs.
When firms use resources in an attempt to secure and maintain grants of market protection from the government, it is called
a. rent-seeking. b. collusion. c. franchising. d. resource investment.
A 1977 amendment to the Federal Reserve Act of 1913 says the Fed should "promote" which of the following goals?
a. only price stability b. only maximum employment c. only price stability and maximum employment d. price stability, maximum employment, and moderate long-term interest rates