A monopolistically competitive firm:
a. tries to differentiate its product from the products of competitors.
b. faces a perfectly elastic demand curve for its product.
c. unlike a perfectly competitive firm, is able to earn positive economic profits in the long run.
d. is always a retail establishment.
QUESTION 2How many U.S. dollars does a U.S. importer need to pay for 100,000 yen worth of stereo equipment when the price of 1 yen is 0.008?
a. 125 million
b. 1.25 million
c. 80,000
d. 1,250
e. 800
QUESTION 3A gaming strategy in which one player states that he/she would break the agreement for eternity if his/her co-player breaks the agreement once is called:
a. a grim trigger.
b. a credible threat.
c. a chain-store paradox.
d. a dominance pull.
QUESTION 4In a monopolistically competitive market:
a. there are significant barriers to the entry of new sellers.
b. firms sell differentiated products.
c. firms face horizontal demand curves.
d. there are a few producers selling standardized products.
QUESTION 5How many dollars do you need to buy a Swedish Kronor (SEK) when the exchange rate is 1 = 6.429 SEK?
a. 0.016
b. 1.056
c. 0.649
d. 0.156
e. 1.56
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