In the long run, the main reason that a monopolist can earn positive economic profits while a perfectly competitive firm cannot is:
A. monopolists enjoy greater economies of scale.
B. there are no barriers to entry in a perfectly competitive market.
C. the monopolist faces an inelastic demand for its product.
D. perfectly competitive firms face greater opportunity costs.
Answer: B
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Referring to the previous question, all else constant, a one unit increase in the price of good Y would cause the quantity demanded of good X to:
A) decrease by 2 units. B) increase by 2 units. C) decrease by 1 unit. D) decrease by 5 units.
An area that is rising significantly in cost is:
a. Health care b. Home appliances and electronics c. College tuition d. both a and c are correct
A country has an absolute advantage in the production of a good if that country
a. can produce the good using fewer resources than another country would require b. has the lowest opportunity cost of producing the good and can produce it with the fewest resources c. has the lowest opportunity cost of producing the good regardless of whether it is produced with the fewest resources d. has the greatest opportunity cost of producing the good regardless of whether it is produced with the fewest resources e. has the greatest opportunity cost of producing the good and produces it with the fewest resources
Figure 4-16
Refer to . Some policymakers have argued that the government should establish a "living wage." A living wage would provide workers a reasonable standard of living in their city or region. If a living wage of $10 per hour is established in the market pictured here, we would expect
a.
employment will increase to 14 million.
b.
employment will decrease to 8 million.
c.
the wage will actually rise to $20 per hour.
d.
there will be a surplus of 14 million workers.