The federal minimum wage law demonstrates
a. market equilibrium.
b. a societal choice for economic equity over efficiency.
c. the function of equilibrium price in a competitive market.
d. government intervention to ensure the equilibrium price.
Ans: b. a societal choice for economic equity over efficiency.
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In the model of monopolistic competition, if firms have ________ average cost curves, then opening trade will ________ the total number of firms and ________ the average price
A) downward sloping; decrease; decrease B) downward sloping; decrease; increase C) downward sloping; increase; decrease D) upward sloping; decrease; increase E) upward sloping; increase; decrease
A restriction of imports that is accomplished by a quota normally
A. can be accomplished also by a tariff. B. cannot be replicated exactly by imposing a tariff. C. can be accomplished also by an export subsidy. D. can be accomplished also by negotiations within GATT.
Under what conditions will a purely competitive firm realize an economic profit? Give a response from a marginal revenue and marginal cost perspective and from a total revenue and total cost perspective
What will be an ideal response?
Which of the following statements is true?
A) A natural monopoly always arises from government intervention in the market. B) An increase in consumer demand can change a natural monopoly into a multi-seller market. C) A natural monopoly earns higher profits than a monopolistically competitive firm because it faces an upward sloping market demand curve. D) A natural monopoly earns higher profits than a monopolistically competitive firm because it faces a horizontal market demand curve.