If a country's income level is high:
A. it must be well-endowed with natural resources.
B. it must have a high level of growth.
C. it usually has a high level of GDP per capita.
D. All of these are true.
Answer: C
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Whenever a firm can charge a price greater than marginal cost
A) the firm must be a monopolist. B) consumers have the ability to choose a close substitute. C) there is some loss of economic efficiency. D) the firm will earn economic profits.
Firms that produce 80 percent of all computer chips have shut down their facilities for maintenance. In the computer chip market this will lead to
A) an increase in price and a decrease in quantity. B) an increase in price and an increase in quantity. C) a decrease in price and a decrease in quantity. D) a decrease in price and an increase in quantity.
The main difference between a monopsonist and a competitive buyer of labor is that
A) the monopsonist can hire as many workers as it wants at the going wage while the competitive firm must raise wages to hire additional workers. B) the competitive firm can hire as many workers as it wants at the going wage while the monopsonist can hire more workers at lower wages. C) the competitor can hire as many workers as it wants at the going wage while the monopsonist must raise wages to hire additional workers. D) the monopsonist can force wages down and still hire as many workers as it wants while the competitive firm must increase the wage rate to hire additional workers.
The achievement of the optimal allocation of society's scarce resources requires that regulators set prices equal to firms marginal cost
a. True b. False