Which of the following conditions distinguishes monopolistic competition from perfect competition?
A. Number of sellers
B. Freedom of entry and exit
C. Perfect information
D. Homogeneity of the product
Answer: D
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Allegiant Air holds a natural monopoly on most of the routes it serves in the United States. Allegiant Air's marginal revenue will ________ when its total revenue ________
A) equal $0; is maximized B) be negative; is maximized C) be positive; is maximized D) inelastic; is increasing E) elastic; is increasing
In the figure above, if the government gives a voucher equal to $3,000 per year to each college student, how many students will be accepted?
A) 8 million per year B) 12 million per year C) 10 million per year D) 14 million per year
An economy at short-run equilibrium with a recessionary gap may:
a. suffer high unemployment for a long time b. have hyperinflation for a considerable period of time. c. suffer huge losses due to high input prices for a long time. d. have a large unsold stock of inventories.
Assume that the economy is in a recession and there is a budget deficit. A strict balanced-budget rule that would require the Federal government to balance its budget during a recession would be:
A. Expansionary and worsen the effects of the recession B. Contractionary and worsen the effects of the recession C. Contractionary and counter the effects of the recession D. Expansionary and counter the effects of the recession