A major difference between monopoly and monopolistic competition is
A. The number of firms in the market.
B. One has a downward-sloping demand curve, and the other does not.
C. One maximizes profits by setting MR equal to MC, and the other does not.
D. One type of firm has market power, and the other does not.
Answer: A
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The process of price cap regulation includes which of the following?
i. a price ceiling ii. marginal cost pricing iii. average cost pricing A) i only B) ii only C) i and ii D) ii and iii E) i and iii
Imagine an economy in which: (1) pieces of paper called yollars are the only thing that buyers give to sellers when they buy goods and services, so it would be common to use, say, 50 yollars to buy a pair of shoes; (2) prices are posted in terms of yardsticks, so you might walk into a grocery store and see that, today, an apple is worth 2 yardsticks; and (3) yardsticks disintegrate overnight, so
no yardstick has any value for more than 24 hours. In this economy, a. the yardstick is a medium of exchange but it cannot serve as a unit of account. b. the yardstick is a unit of account but it cannot serve as a store of value. c. the yardstick is a medium of exchange but it cannot serve as a store of value, and the yollar is a unit of account. d. the yollar is a unit of account, but it is not a medium of exchange and it is not a liquid asset.