Entrepreneurs:
A. work exclusively in government and university R&D laboratories.
B. often form small companies called start-ups.
C. are less likely to exist in service industries than in manufacturing industries.
D. are engaged mainly in basic scientific research.
Answer: B
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Which of the following events does NOT occur when market demand shifts leftward in an increasing-cost industry?
A) Initially, the output produced by existing firms declines along the short-run market supply curve. B) The market price declines below the minimum LAC due to the short-run supply response. C) The market supply curve shifts leftward as some firms exit the market when the market price is below the minimum LAC. D) As firms exit, the market price rises and attracts other firms to enter the market. E) The LAC curve shifts downward as output falls.
Productive inefficiency could arise from
a. a waste of available labor b. a lack of resources c. an improvement in technology d. a movement along the production possibilities frontier e. too many goods being produced by the country or firm
You are part of a local community theater group. It is the goal of the group to increase the amount of revenue earned through ticket sales. Mary says the obvious solution is to increase ticket prices. Is Mary correct?
A. Mary is correct if the demand for tickets is price inelastic. B. Mary is incorrect if the demand for tickets is price inelastic. C. Mary is correct. The increase in ticket prices will always increase revenue. D. Mary is incorrect. The increase in ticket prices will never increase revenue.
Which is a characteristic of a public good?
A)non—excludability B)excludability C) rivalry among firms D) no free-rider problem