Which of the following shows an accurate difference between (A) perfect competition and (B) monopolistic competition?
a. (A) Price is more than ATC; (B) Price is equal to ATC.
b. (A) Firms are productively inefficient; (B) Firm are productively efficient.
c. (A) Price equals marginal cost; (B) Price is more than marginal cost.
d. (A) Firms are allocatively inefficient; (B) Firms are allocatively efficient.
c. (A) Price equals marginal cost; (B) Price is more than marginal cost.
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Figure 4.4 illustrates the supply of tacos. If the government offered a subsidy to Mexican restaurants for each taco they produce, this would most likely cause a movement from
A) point a to point c. B) point c to point b. C) S0 to S1. D) S2 to S1.
Structures in the economy increase aggregate demand when the economy is in recession and decrease aggregate demand when the economy is inflationary are known as:
a. tax transfers. b. inventory investment. c. accelerators. d. depreciation. e. automatic stabilizers.