Monopolistic competition is similar to perfect competition in that:
a. there are only a few firms in the market.
b. the entry into and exit from the market is easy.
c. there are significant barriers to entry in the market.
d. each firm sells a homogeneous product.
e. each firm differentiates its product through advertising.
b
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The marginal product of an input in the production process is the increase in
a. total revenue obtained from an additional unit of that input. b. profit obtained from an additional unit of that input. c. total revenue obtained from an additional unit of that input. d. quantity of output obtained from an additional unit of that input.
Answer the following statements true (T) or false (F)
1. As long as government officials have to be elected, they are always held accounted for their policy decisions and choices. 2. Economic analysis would focus on the size of the government, in order to assess whether or not it fosters economic efficiency. 3. It is generally believed that, because of the election process, the incentives and pressures for internal efficiency are stronger in the public sector than in the private sector. 4. Critics of government contend that the market system creates incentives and pressures for internal efficiency which are absent in the public sector. 5. "Good economics" is about marginal costs and marginal benefits of specific projects; "good politics" is more about clear benefits and hidden costs.