List four characteristics of monopolistic competition
What will be an ideal response?
There are a large number of firms; each produces a slightly different product; firms compete on price, quality and marketing; and firms are free to enter and exit. As a result of these characteristics, there are no dominant firms and each firms have a small market share. Because the firms produce differentiated products, firms can charge a markup and, in the long run, firms have excess capacity.
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When marginal product is rising, marginal costs will: a. rising
b. remaining unchanged. c. falling. d. rising by an equal amount.
Celia buys 24 gallons of gasoline per month when the price is $2 per gallon, but only 16 gallons if the price rises to $3 per gallon. Within this range, her demand for gasoline is
a. unitary elastic b. perfectly inelastic c. perfectly elastic d. inelastic e. elastic
Which of the following is true?
a. The national debt increases in size whenever the federal government has a surplus budget. b. The national debt's size decreased steadily after 1980. c. The current U.S. national debt is over $13 trillion. d. The size of the national debt currently is about the same size as it was during World War II.
Why would the supply curve of a dog-walking business be considered elastic?
(A) Because it can hire workers quickly if the price rises. (B) Because the supply of dogs changes quickly. (C) Because the supply of dog walking isn't easily expanded or reduced. (D) Because the demand for dog-walking services fluctuates.