Economic inefficiency of a monopoly occurs because
A. P > MR.
B. P = ATCmin.
C. P > MC.
D. MR = MC.
Answer: C
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Firms in monopolistic competition can achieve product differentiation by
A) expanding plant size. B) exploiting economies of scale in production. C) advertising special characteristics. D) setting the price equal to average revenue.
What is true of equilibrium in the game in Scenario 13.14?
A) In equilibrium, both firms choose Q = 50. B) In equilibrium, both firms choose Q = 100. C) There are two equilibria, at Q = 50 and at Q = 100. D) The only equilibrium is in mixed strategies. E) The two equilibria are those associated with the (40,30 ) outcome and the (30,40 ) outcome.
Money is
a. an asset that is widely accepted as a means of payment in the economy b. any asset that is convertible into cash c. an asset that is backed by a precious metal such as gold or silver d. any financial asset created and issued by government e. anything used to pay for goods and services, including currency, checks, and credit cards
Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Amy should specialize in producing
A. cars. B. cheese. C. both cheese and cars. D. neither cheese nor cars.