To the extent that brand names developed in monopolistic competition provide a benefit to the consumer, it is:
a. by allowing for a lower total cost.
b. through their assurance that the firm will provide a quality product in order to preserve repeated transactions.
c. by encouraging the entry of new competitors.
d. by allowing the firm to engage in price discrimination.
Ans: b. through their assurance that the firm will provide a quality product in order to preserve repeated transactions.
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If a union can successfully shift the demand curve for union labor rightward, the union can achieve
A) an increase in wages and employment. B) an increase in wages but a decrease in employment. C) an increase in employment but a decrease in wages. D) a decrease in both employment and wages.
If producers believe that the increase in their relative prices is small relative to the increase in the general price level, then the slope of the short-run aggregate supply curve will be
A) zero. B) small. C) large. D) negative.