In monopolistically competitive markets, resources are:
A. overallocated because long-run equilibrium occurs where price exceeds marginal cost.
B. underallocated because long-run equilibrium occurs where price exceeds marginal cost.
C. overallocated because long-run equilibrium occurs where marginal cost exceeds price.
D. underallocated because long-run equilibrium occurs where marginal cost exceeds price.
Answer: B
Economics
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a. expansion b. contraction c. peak d. trough e. recession
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If the MPC equals 0.80 then:
a. the MPS equals 1.20. b. the multiplier equals 0.20. c. the multiplier equals 1 divided by 0.80. d. the multiplier equals 5. e. none of these.
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