For a firm that is a price taker in the product market, all of the following are true except one. Which one is the exception?
a. Marginal revenue product can be found by multiplying price by marginal product.
b. Marginal revenue product is the change in total revenue that results from increasing the use of a resource by one unit, other things constant.
c. Marginal revenue product is constant at the prevailing price.
d. Increased output by the firm has no impact on the price of the product.
e. The marginal revenue product curve declines because of diminishing marginal returns.
C
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The above figure shows the production possibility frontier for a country. Suppose the country is producing at point E. What would be the opportunity cost to increase the production of wine to 9 thousand bottles?
A) 12 tons of rice B) 15 thousand bottles of wine C) 9 thousand bottles of wine D) 3 tons of rice E) Nothing, it is a free lunch.
The difference between voluntary and involuntary unemployment is that:
a. involuntary unemployment exists when wages are high. b. voluntary unemployment exists in equilibrium. c. voluntary unemployment falls as wages rise. d. both b and c. e. all of the above.
If demand is inelastic, an increase in the price of a good will cause total revenue to:
a. fall. b. remain constant since the decrease in quantity sold is exactly offset by the price increase. c. rise. d. rise if it is a normal good and fall if it is an inferior good.
Another term for the opportunity cost of capital is
A. a normal wage rate. B. the normal rate of return. C. a normal profit. D. the normal interest rate.