For the monopolistically competitive firm, in both the short run and the long run
A) the demand curve is inelastic.
B) price will exceed marginal cost.
C) there will be no economic profit.
D) production will be at minimum average cost.
B
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In the above figure, starting at E1, if there is a supply shock that is temporary, the
A) aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1. B) aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1. C) aggregate supply would shift to SRAS1 and then return to SRAS0. D) aggregate supply would shift to SRAS0 and LRAS1 would shift to LRAS0.
A consumer has $100 to be spent on tables and chairs. If his income increases to $200, the prices of the goods remaining unchanged, his budget constraint:
A) pivots to the left along the vertical axis. B) pivots to the right along the horizontal axis. C) shifts to the left. D) shifts to the right.