In a perfectly competitive industry, influence over price is exerted by
A. individual sellers.
B. individual buyers.
C. the largest firms.
D. the forces of supply and demand.
Answer: D
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A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is
A) an intermediate good. B) part of net exports if the fish was caught beyond the U.S. border. C) an investment. D) an example of government expenditures on goods and services. E) a consumption expenditure.
Education of girls is a crucial development investment because
(a) it leads to improved child health. (b) it leads to reduced fertility. (c) women do most of the work in agriculture. (d) all of the above.
The marginal rate of technical substitution (MRTS) along an isoquant:
A) is equal to the price ratio at all points along an isoquant. B) is equal to the ratio of the marginal utilities of the two goods. C) is equal to the ratio of the marginal products of the two inputs. D) remains constant as we alter the combinations of the two inputs.
The Solo Coal Mine is the only employer in the small town of Way out there. The market supply of coal miners is Qs = 0.02W - 400 and Qd = 500 - 0.02W, where W is the annual wage of a coal miner and Q is the number of coal miners. What is the deadweight loss due to the monopsony in the coal miners market?
A. $27,778 B. $13,889 C. $41,667 D. $21,667