Long-run equilibrium under monopolistic competition and perfect competition is similar in that
A) firms produce at the minimum point of their average cost curves.
B) price equals marginal cost.
C) firms break even.
D) price equals marginal revenue.
Answer: C
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aWanda sold her mother’s dining set to Mattie for $250. Later, Mattie told LaWanda that she would have paid her $300. What is the term for the fifty-dollar difference between what Mattie paid and what she was willing to pay?
a. market equilibrium b. consumer surplus c. producer surplus d. market subsidy
Starting from potential output, if firms become more optimistic about the future and decide to increase their investment in new capital, then this will generate a(n) ________ gap and inflation will ________.
A. expansionary; increase B. expansionary; decrease C. recessionary; decrease D. recessionary; increase
In an oligopolistic market:
A. one firm is always dominant. B. products may be standardized or differentiated. C. the four largest firms account for 20 percent or less of total sales. D. the industry is monopolistically competitive.
In the past few years two deviations from U.S. free trade policies have been _________________ and ______________________.
Fill in the blank(s) with the appropriate word(s).