The greater the product differentiation between monopolistically competitive firms
A. the greater the price elasticity of demand.
B. the higher the average variable costs.
C. the lower the barriers to entry.
D. the greater the price elasticity of supply.
Answer: A
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Which of the following characteristics of a production possibilities frontier indicates that trade-offs must be made?
A. The downward slope B. The upward slope C. The constant slope D. The curvature
A decrease in the real wage rate
A) shifts the labor demand curve rightward. B) shifts the labor demand curve leftward. C) shifts the labor supply curve leftward. D) none of the above because a change in the real wage rate does not shift either the labor demand or labor supply curve.
Those economists who do not believe there is anything inherently wrong with monopolies advocate a policy of
a. laissez-faire b. marginal cost pricing c. antitrust d. patent control e. nationalization
We have a futures contract for the purchase of 10,000 bushels of wheat at $3.00 per bushel. If the price of wheat were to increase to $3.50, explain what happens to the parties involved in the contract in terms of marking to market. Be sure to identify who is long and short and specifically how much is transferred.
What will be an ideal response?