In the perfectly competitive market, individual firms exert no effect on the market price. Therefore, the firm's marginal revenue is:
A. zero.
B. an upward-sloping curve.
C. a downward-sloping curve.
D. the same as the firm's demand curve.
Answer: D
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The demand for labor is a derived demand. Employers hire workers until the
A. wage rate equals the average product of labor. B. wage rate equals the marginal revenue product of labor. C. last worker hired adds nothing to total output. D. average product of labor is zero.
In cases of natural monopolies, society would be better off with many firms competing with each other.
Answer the following statement true (T) or false (F)
If the government allowed a free market for transplant organs such as kidneys to exist, the
a. shortage of organs would be eliminated, and there would be no surplus of organs. b. shortage of organs would be eliminated, but a surplus of organs would develop. c. shortage of organs would persist. d. overall well-being of society would remain unchanged.
In Figure 2.1, a "P" for price would go in
A. Box 2. B. Box 4. C. Box 6. D. Box 1.