Economies of scale are illustrated by: A) a downward sloping long-run average cost curve. B) a flat long-run average cost curve. C) an upward-sloping long-run average cost curve. D) a downward-sloping short-run average total cost curve. ANSWER A
Date: September 10th, 2020
Assume the marginal revenue from each additional unit of a good sold is 0. In this case, we can conclude that demand for the good is: A) unit elastic B) perfectly elastic. C) perfectly inelastic. D) relatively inelastic. ANSWER B
Date: September 10th, 2020
In which of the following situations would each of the members be responsible for producing an equal share of the total amount of output sold by the cartel engaged in joint profit maximization? A) When the amount of revenue generated by each member of the cartel is the same. B) When there are no economies […]
Date: September 10th, 2020
The vital link between the real and monetary sectors of the economy is the: A) price level. B) interest rate. C) balance of payments. D) budget deficit. ANSWER B
Date: September 10th, 2020
Because most gas stations are small relative to the market in which they operate and gasoline is fairly homogeneous, the market for gasoline is considered to be perfectly competitive. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Marginal revenue equals 0 when: A) total revenue is increasing. B) total revenue is at its maximum. C) total revenue is decreasing. D) none of the above; marginal revenue is always positive. ANSWER B
Date: September 10th, 2020
Limit pricing is used primarily to: A) discourage new firms from entering a market. B) reduce (limit) the profits of all of the firms in the industry. C) drive other firms out of a market. D) establish a minimum price all of the firms in the market will charge. ANSWER A
Date: September 10th, 2020
The positively-sloped part of the long-run average total cost curve is due to which of the following? A) Diseconomies of scale. B) Diminishing returns. C) The firm being able to take advantage of large-scale production techniques as it expands its output. D) The increase in productivity that results from specialization. ANSWER A
Date: September 10th, 2020
Assume a monopolistically competitive firm comes up with a new innovation that allows it to earn above-normal economic profits. Given the nature of the market in which it operates, over time those profits will be competed away as new competitors enter the market. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The primary objective of a cartel is to: A) maximize the amount of profit received by each member of the organization. B) maximize the joint profits of the members of the organization. C) ensure each member of the organization some minimum amount of profit. D) maximize the average profits of the members of the organization. […]
Date: September 10th, 2020
