A monopolistically competitive firm:
a. tries to differentiate its product from the products of competitors
b. faces a perfectly elastic demand curve for its product.
c. unlike a perfectly competitive firm, is able to earn positive economic profits in the long run.
d. is always a retail establishment.
a
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An "omitted variable" is
A) a variable that has no impact on other variables in an economic analysis. B) a variable which is purposely omitted from an economic analysis. C) a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect. D) a variable which is inadvertently omitted from an economic analysis.
Fiscal policy refers to a government's choices over its
A) expenditures, taxes, transfers, and borrowing. B) expenditures, taxes, issuance of money, and borrowing. C) expenditures, foreign affairs, issuance of money, and borrowing. D) issuance of money, taxes, environmental regulations, and foreign affairs.
The bonus of a plant manager in a vertically integrated firm is based on the following formula:
Bonus = 10,000 - 0.5(Qf - Q) where Qf is feasible production and Q is actual production. The value for Qf is provided by the plant manager at the beginning of the year. With this scheme, the plant manager has an incentive: A) to underestimate Qf. B) to overestimate Qf. C) to reveal the true Qf and make Q as small as possible. D) to reveal the true Qf and make Q as large as possible.
In a typical 10-year period, about one in four families falls below the poverty line in at least one year. What percentage of families are poor for eight or more years?