Competition as a dynamic process implies that the individual firms in an industry
a. face a perfectly elastic demand curve.
b. utilize a variety of techniques, such as product, style, and price, to win the dollar votes of consumers.
c. produce a homogeneous product.
d. cooperate, attempting to establish a price and output structure so each firm can survive and continue to serve the consumer.
B
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The income per capita in Baltonia is 64,163 in Baltonian currency. If the price of a basket of goods worth $1 in the U.S. is 5.50 units of Baltonian currency, Baltonia's income per capita in purchasing power parity is:
A) $11,666. B) $10,257.48. C) $2,832. D) $15,624.50. The price of a given basket of goods in Country 1 is 10 karls. The price of the same basket of goods in Country 2 is 25 ritz and $2 in the U.S. Country 1 has a income per capita of 3,200 karls and Country 2 has a income per capita of 5,500 ritz.
Refer to the figure above. What is the equilibrium price after the demand curve shifts to D2?
A) $20 B) $40 C) $60 D) $80
A monopolistic competitive firm:
a. will always earn monopoly profits. b. will never earn monopoly profits. c. may earn monopoly profits in the short run. d. may earn monopoly profits in the long run.
Suppose the economy is initially operating at point A in the above figure. Which of the following statements is TRUE?
A) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the short run. B) An unexpected reduction in aggregate demand will cause the economy to move from point A to point C in the short run. C) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the long run. D) none of the above