Which of the following is an accurate statement about an increasing-cost industry?
a. Input prices stay the same as an industry uses a large portion of the input.
b. Input prices stay the same as an industry uses a small portion of the input.
c. Input prices rise as an industry uses a large portion of the input.
d. Input prices drop as an industry uses a large portion of the input
c. Input prices rise as an industry uses a large portion of the input.
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Refer to Figure 7.1. Start from initial equilibrium. If firms increase their capital stock, the new real wage could be ________ and the new amount of labor employed could be ________
A) X; A B) Z; A C) X; C D) Z; C
The labor supply curve for a monopsony is
A) perfectly horizontal. B) perfectly vertical. C) upward sloping but not perfectly vertical. D) downward sloping.
It is impossible to create a free market system that promotes economic efficiency
Indicate whether the statement is true or false
A single firm that charges the monopoly price in the market earns $800. If another firm successfully enters the market, the incumbent's profits fall to $500 and the entrant earns $450. If the incumbent engages in limit pricing, its profits are $600. For what interest rate, i, is limit pricing a profitable strategy for the incumbent?
A. i > 1.5 B. 0.5 < i < 1.0 C. i < 0.5 D. 1.0 < i < 1.5