If demand for a seller's product is perfectly elastic, which of the following is true?
i. The firm will sell no output if it sets the price its product above the market price.
ii. There are many perfect substitutes for the seller's product.
iii. The firm will sell no output if it sets the price its product below the market price.
A) i only
B) ii only
C) iii only
D) i and ii
E) ii and iii
D
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If an economy is operating at a point inside the production possibilities frontier, then
A) society's resources are being inefficiently utilized. B) the PPF curve will shift inward. C) society's resources are being used to produce too many consumer goods. D) economic policy must retard further growth of the economy.
Refer to Figure 2-2. If Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to maximize production?
A) 30 dozen roses B) 50 dozen roses C) 100 dozen roses D) 150 dozen roses
The ratio at which a country can trade its exports for imports from other countries is called
A) a free trade agreement. B) the terms of trade. C) a trade barrier. D) autarky.
An unregulated electric company is a monopolist and faces demand of Q = 50 - 10P. If the company has zero marginal costs, its profit-maximizing price is
a. 0 b. 1 c. 2.5 d. 5