Two goods are substitutes if an increase in the price of one good leads to a decrease in demand for the other.
Answer the following statement true (T) or false (F)
False
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Which of the following is characteristics is common to both monopoly and monopolistic competition?
A) Ease of entry into the industry. B) Firms are price setters. C) A relatively large number of sellers. D) Long-run economic profit equals 0.
Working with the life-cycle hypothesis, we find in a cross-section study of consumption that as income rises there is a growing proportion of ________ people and thus a ________ saving ratio
A) retired, rising B) retired, falling C) working, rising D) working, falling
Suppose there are 100 identical firms in the rag industry, and each firm is willing to supply 10 rags at any price. The market supply curve will be a
A) vertical line where Q = 10. B) vertical line where Q = 100. C) vertical line where Q = 1000. D) horizontal line where Q = 1000.
Suppose the production function is given by Q = 3K + 4L. What is the average product of capital when 10 units of capital and 10 units of labor are employed?
A. 4 B. 3 C. 45 D. 7