Which of the following statements is correct about the demand curve of the perfectly competitive industry?
A) The demand curve of the perfectly competitive industry is horizontal as are the demand curves facing the individual firms.
B) The market demand curve of perfect competition is vertical because the individual consumers are buying a homogeneous product.
C) The market demand curve of the perfectly competitive industry is downward sloping while the demand curve facing an individual firm is horizontal.
D) The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.
C
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The price elasticity of demand is a measure of the
A. relationship between price and profitability. B. sensitivity of a good's price to changes in demand. C. responsiveness of buyers of a good to changes in its price. D. effect of changes in demand on the price.
Factory A can reduce emissions at a cost of $150 per ton. Factory B can reduce emissions at a cost of $115 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B. b. Both firms have an incentive to buy pollution rights c. Factory B can profit from selling its pollution rights to Factory A. d. Both firms have an incentive to sell pollution rights.
The accompanying figure shows the production possibilities curve for the island of Genovia:
The opportunity cost of producing one ton of agricultural products in Genovia is:
A. 1/50 of a car. B. 1/5 of a car. C. 1 car. D. 1,000 cars.
The view that many welfare mothers have baby after baby to keep their welfare checks rising is a view held by
A. many conservatives. B. many liberals. C. both many liberals and conservatives. D. neither many liberals nor many conservatives.