Given the prices of two goods, all quantity combinations inside the budget line are:
a. indifferent.
b. efficient.
c. unattainable.
d. attainable.
QUESTION 2Product differentiation makes the demand for a monopolistically competitive firm's product:
a. perfectly elastic.
b. more elastic than for a monopoly.
c. more inelastic than for a monopoly.
d. perfectly inelastic.
QUESTION 3Assume the price of good Y with its quantity measured on the vertical axis is 100 and the price of good X with its quantity measured on the horizontal axis is 10 . If the consumer's budget is 500, then the absolute value of the slope of the budget line is:
a. 500.
b. 1/10.
c. 10.
d. 100.
QUESTION 4In the long run, both monopolistic competition and perfect competition result in:
a. a wide variety of brand-name choices for consumers.
b. an efficient allocation of resources.
c. zero economic profit for firms.
d. excess capacity.
QUESTION 5Assume the price of good Y with its quantity measured on the vertical axis is 20 and the price of good X with its quantity measured on the horizontal axis is 5 . If the consumer's budget is 100, then the absolute value of the slope of the budget line is:
a. 100.
b. 20.
c. 1/4.
d. 4.
QUESTION 6Which of the following is a characteristic of the monopolistic competition market structure?
a. Many firms and a homogeneous product.
b. Few firms and differentiated products.
c. Few firms and similar products.
d. Few firms and a homogeneous product.
e. Many firms and differentiated products.
QUESTION 7Moving along a budget line, the prices of both goods:
a. vary and the consumer's budget is held constant.
b. are held constant and the consumer's budget varies.
c. and the consumer's budget are held constant.
d. and the consumer's budget vary.
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