If firms in a monopolistically competitive industry are making profits in the short run, then
A) barriers to entry will be erected to keep out rivals.
B) some firms will ultimately exit the industry.
C) they will resort to advertising wars to help sustain these profits.
D) new firms will enter the market.
Answer: D
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The study by economists Cox and Alm found
a. inequality in consumption is much smaller than inequality in annual income. b. inequality in consumption is slightly smaller than inequality in annual income. c. inequality in consumption is slightly larger than inequality in annual income. d. inequality in consumption is much larger than inequality in annual income.
The difference between microeconomics and macroeconomics is that
a. microeconomics involves mathematical relationships, and macroeconomics is predominantly a verbal analysis. b. microeconomics deals with the principle of scarcity, and macroeconomics deals with the problem of poverty. c. microeconomics deals with narrowly defined units, and macroeconomics focuses on highly aggregated markets. d. microeconomics is normative, and macroeconomics is positive.