In the long run, economic theory predicts that a monopolistically competitive firm will:
A. earn an economic profit.
B. realize all economies of scale.
C. equate price and marginal cost.
D. have excess production capacity.
Answer: D
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Prices that adjust slowly are
A) auction prices. B) custom prices. C) flexible prices. D) heavy prices.
The natural rate hypothesis concludes that the inflation rate increases, then in the short run there is
A) a downward movement along the short-run Phillips curve. B) an upward movement along the short-run Phillips curve. C) no change at all in the short-run Phillips curve. D) an upward shift of the short-run Phillips curve. E) a downward shift of the short-run Phillips curve.
A graph of the value of one variable against the value of another variable is known as a
A) two-dimensional graph. B) three-dimensional graph. C) time-series graph. D) scatter diagram. E) two-variable graph.
Since 1967, there has not been much change in the income of the bottom 10% of earners in the U.S. economy. This can be attributed to:
A) the adoption of labor-saving technology. B) the cultural and social changes in the economy. C) the adoption of labor-complementary technology. D) the adoption of skill-biased technology by most firms.