A monopoly firm is a ______________ and faces a __________ sloping demand curve
a. Price taker; horizontal
b. Price maker; horizontal
c. Price maker; downward
d. Price taker; downward
c
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Suppose there are only two people, Mr. Mullinax and Ms. Fleming, who must split a fixed income of $500. For Mr. Mullinax, the marginal utility of income is MU m = 600 - 2I m , while for Ms. Fleming, marginal utility is MU f = 600 - 3I f , where I m and I f are the amounts of income to Mr. Mullinax and Ms. Fleming, respectively.
(A) What is the optimal distribution of income if the social welfare function is additive? (B) What is the optimal distribution if society values only the utility of Ms. Fleming? What if the reverse is true? Comment on your answer. (C) Finally, comment on how your answers change if the marginal utility of income for both Mr. Mullinax and Ms. Fleming is constant such that Mu m = 250 = MU f . (This one is subtle.) The setup should be I m + I f = 500 and 600 - 3I f = 600 - 2I m
Which of the following is true about the long run operations of perfectly competitive firms? a. They produce with productive efficiency. b. They produce with allocative efficiency. c. They earn zero economic profits
d. all of the above
Suppose the market for home-grown peppers in the town of Smallville is comprised of two farmers. Explain why they might try to collude
When an input represents a larger proportion of a firm's total costs, then
A) demand for the input will tends to be less elastic. B) the input demand will not vary significantly with a change in input price. C) the usage of the input cannot be varied in the production function. D) demand for the input will tends to be more elastic.