Which of the following is true of the model of monopolistic competition?
a. Barriers to entry enable firms to enjoy positive profits in the long run.
b. The number of firms declines over time as a result of economies of scale.
c. The monopolistically competitive firms enjoy a greater market power than a monopolist.
d. Firms tend to locate near each other in order to minimize total travel costs for consumers.
e. The firms end up charging same prices for their individual products.
d
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If the autarky price of S (in terms of T) were lower in country A than in country B,
A) A has a comparative advantage in S. B) B has a comparative advantage in T. C) A has a comparative disadvantage in T. D) All of the above.
Assuming that the GDP breakdown shown in Table 2.1 is typical of a given year in the U.S. we can say that ________
A) we spend twice as much on goods consumption as we do on services B) consumption of durable goods is twice that of nondurables C) government purchases is the largest main component of GDP D) all of the above E) none of the above