Monopolistic competition and perfect competition are different in that monopolistically competitive firms:
a. cannot earn profits in the short run.
b. face firm demand curves that are less elastic than perfectly competitive firms.
c. face substantial barriers to entry.
d. earn economic profits in the long run.
QUESTION 2Which of the following is an example of an obligation associated with a right?
a. Providing adequate notice period to your tenants to vacate your house.
b. Allowing your kids to play with other children in the neighborhood.
c. Allowing neighbors to use your lawn to maintain healthy public relations.
d. Providing proper education and adequate nutrition to your children.
QUESTION 3Which of the following is characteristic of monopolistically competitive industries?
a. Product differentiation.
b. A substantial likelihood of collusion.
c. Relatively small market shares of each producer.
d. Both (a) and (c) are characteristics of monopolistically competitive industries.
QUESTION 4Which of the following is true of property rights?
a. They are rights to use a public good without paying for it.
b. They usually specify the owner's alternatives.
c. The are associated with the exchange of commodities but not services.
d. They are often open-ended and do not exhaustively specify the owner's alternatives.
QUESTION 5Advertising is very important to firm operating in:
a. perfect competition but not in monopolistic competition.
b. monopolistic competition but not in perfect competition.
c. perfect competition and monopolistic competition but not in monopoly.
d. none of the above
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