Which of the following is NOT a requirement for the existence of monopolistic competition in a market?

Select one:

a. numerous small sellers.

b. full information about the market among buyers and sellers.

c. homogenous output.

d. freedom of entry into the market.

For given input prices, isocosts farther from the origin are associated with

Select one:

a. lower costs.

b. the same costs.

c. higher costs.

d. initially lower then higher costs.

In a perfectly competitive market, firms produce homogenous output. What does that mean?

Select one:

a. Firms produce output during the same time period in which they buy inputs.

b. All firms purchase the same type of inputs for their production process.

c. All firms produce the exact same good or service.

d. Firms know everything about every other firm.

Bob has been assigned by his supervisor to calculate the own price elasticity of demand for the good his firm sells. Bob has no idea how to go about it and he turns to you for help. You tell Bob that he needs to calculate:

Select one:

a. the slope of demand curve by price.

b. the percentage change in quantity demanded divided by percentage change in price.

c. the inverse of the price elasticity of supply

d. the percentage change in income divided by percentage change in price.

e. the percentage change in demand divided by the percentage change in supply.

The recent political instability in Spain has resulted in Spanish citizens saving more due to an uncertain future. In terms of the loanable funds framework this would be shown as:

Select one:

a. An increase in the demand for loanable funds and thus higher interest rates in Spain.

b. An increase in the supply of loanable funds and thus lower interest rates in Spain.

c. A decrease in the supply of loanable funds and thus higher interest rates in Spain.

d. A decrease in the demand for loanable funds and thus higher interest rates in Spain.

e. A decrease in the demand for loanable funds and thus lower interest rates in Spain.