In the long-run equilibrium, both the perfectly competitive firm and the monopolistically competitive firm produce the output at which MR=MC and charge a price equal to the average total cost of production
Indicate whether the statement is true or false
TRUE
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Loans are better than grants for higher education.
A. True B. False C. Uncertain
If a large increase in the wage rate leads to a net increase in the use of capital by a firm, then
A. the substitution effect outweighed the output effect. B. the output effect outweighed the substitution effect. C. the substitution and output effects are equal. D. there is no way to estimate the relative size of the substitution and output effect.
In a decreasing-cost industry, an increase in industry output will
A) lead to a higher market price. B) lead to a lower market price. C) shift each firm's average fixed cost curve up. D) shift each firm's short run supply curve up.
Which of the following does the production possibilities curve illustrate?
a. The tradeoffs facing a society b. The fact that more of one product can be produced only by reducing the quantity of other products that are being produced, assuming that resources are being used efficiently c. The maximum output that can be produced with a limited amount of resources d. The opportunity cost of alternative choices e. All of these