Which of the following will lead to an outward shift in the firm's short-run demand for labor?
A. a reduction in average consumer income
B. an increase in the price of output
C. less capital per unit of labor
D. a decline in labor productivity
Answer: B
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What does the Herfindahl-Hirschman Index value near zero imply about the market?
a. Monopoly b. Perfect competition c. Monopolistic competition d. Oligopoly
In a world of perfect knowledge and communication, competitive markets, and no uncertainty,
a. there would be neither economic profits nor economic losses. b. economic profits would exist, but losses would be eliminated. c. economic profits and losses would exist to a greater degree than presently is the case. d. there would be economic profits; there is not enough information to comment on economic losses.
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
According to the graph shown, if a firm is producing at Q2, and it is identical to others in the market:
A. firms will enter this market. B. economic profits are zero. C. firms will leave this market. D. profits are not being maximized.
The process of analyzing a problem in reverse-starting with the last choice, then the second-to-last choice, and so on, to determine the optimal strategy-is called:
A. forward thinking. B. backward working. C. backward thinking. D. backward induction.