When a firm has maximized profits
A) it has also minimized total costs.
B) the marginal product of each input is also maximized.
C) the marginal physical product is greater than the input price for all inputs.
D) its marginal cost is zero.
Answer: A
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Which of the following is not a technical barrier to entry in a monopolized market?
a. A patent. b. Decreasing average cost. c. A low cost method of production known only by monopolist. d. Increasing returns to scale.
Which of the following firms is most likely a price leader in an oligopolistic industry?
a. Firm A controls 15 percent of the market for automobiles. b. Firm B accounts for 10 percent of total wheat sales. c. Firm C controls 65 percent of the market for heavy machinery. d. Firm D accounts for 12 percent of the fast food market.
Suppose the government reduces marginal income tax rates and increases welfare payments. This policy combination will:
A. increase the incentive to work. B. have no effect on the incentive to work. C. have an ambiguous effect on the incentive to work. D. reduce the incentive to work.
A solid and defensible jury award that punishes negligent behavior can be good for the economy primarily because it
A. compensates the injured party for all damages. B. takes from the rich and gives to the poor. C. reassures the public that the legal system is 'fair'. D. discourages imprudent or reckless behavior.