A monopolistically competitive firm is producing at an output level in the short run where average total cost is $4.50, price is $4.00, marginal revenue is $2.50, and marginal cost is $2.50. This firm is operating:
A. at the break-even level of output in the short run.
B. at an efficient level of output in the short run.
C. with a loss in the short run.
D. with a profit in the short run.
Answer: C
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If government officials break a natural monopoly up into several smaller firms, then
a. competition will force firms to attain economic profits rather than accounting profits. b. competition will force firms to produce surplus output, which drives up price. c. the average costs of production will increase. d. the average costs of production will decrease.
People sometimes act differently in different settings. An economist is likely to explain this by saying
A) the benefits and costs of certain behaviors can be different in different settings. B) people are hard to figure out. C) people behave as others behave. D) it is hard to figure out what makes people tick. E) none of the above
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.
Refer to the information provided in Table 22.4 below to answer the question(s) that follow.
Table 22.4
Refer to Table 22.4. The total number of people employed is
A. 190 million. B. 120 million. C. 114 million. D. 57 million.