Compared to a firm in perfect competition, the monopolistically competitive firm tends to
a. produce less and charge a higher price
b. produce less and charge a lower price
c. produce more and charge a lower price
d. produce more and charge a higher price
e. produce the same quantity
QUESTION 2If general tax revenues were used to subsidize production of toothpicks, the government's actions would have
a. widespread benefits and costs
b. widespread costs and concentrated benefits
c. concentrated benefits and costs
d. widespread benefits and concentrated costs
e. widespread benefits and either widespread or concentrated costs
QUESTION 3Which of the following characteristics does perfect competition have in common with monopolistic competition?
a. price-taking firms
b. homogeneous products
c. no barriers to entry
d. horizontal demand curve
e. neither market advertises
QUESTION 4Legislation that provides a subsidies for tobacco growers is an example of
a. public-interest legislation
b. competing-interest legislation
c. a positive-sum game
d. special-interest legislation
e. concentrated-costs legislation
QUESTION 5One difference between perfect competition and monopolistic competition is that
a. in perfect competition, firms cannot earn a long-run economic profit
b. in perfect competition, firms take full advantage of economies of scale in long-run equilibrium; in monopolistic competition, firms do not
c. only under perfect competition is there ease of entry and exit
d. in monopolistic competition, the firm's demand curve is horizontal; in perfect competition, the firm's demand curve slopes downward
e. in perfect competition, there are many firms; under monopolistic competition, there are few firms
QUESTION 6Legislation that provides a price support for dairy farmers is an example of
a. public-interest legislation
b. competing-interest legislation
c. a positive-sum game
d. special-interest legislation
e. concentrated-costs legislation
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