Economists agree that a monopolistically competitive market structure
A) can eliminate any excess capacity if all firms in the industry devote more funds to differentiating their products.
B) lowers consumer utility because consumers pay a price higher than the marginal cost of production.
C) is detrimental to society because it leads to a waste of scarce resources.
D) benefits consumers because firms produce products that appeal to a wide range of consumer tastes.
D
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What can income elasticity of demand tell us about the nature of a good?
What will be an ideal response?
The crowding-out effect implies that a
a. budget surplus will be highly effective against inflation. b. budget deficit is likely to stimulate aggregate demand and cause inflation. c. budget deficit will increase real interest rates and, thereby, retard private spending. d. budget surplus will retard aggregate demand and throw the economy into a downward spiral.