Which of the following is part of the market structure for monopolistic competition?
A) barriers to entry
B) a large number of firms compete
C) each firm produces a differentiated product
D) Both answers B and C are correct.
D
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A chemical factory and a fishing club share a lake. Producing chemicals creates water pollution that harms the fish. Initially the lake is owned by no one
Keeping in mind the Coase theorem, suppose transactions costs are low and the fishing club is given ownership of the lake. Compared to the situation with no property rights, the quantity of chemicals produced A) will decrease. B) will stay the same. C) will increase. D) changes, but the direction of the change is ambiguous.
When housing prices decrease, household wealth ________ and consumption ________.
A. increases; decreases B. increases; increases C. decreases; increases D. decreases; decreases