Is a monopolistically competitive firm productively efficient?
A) No, because it does not produce at minimum average total cost.
B) Yes, because it produces where marginal cost equals marginal revenue.
C) No, because price is greater than marginal cost.
D) Yes, because price equals average total cost.
Answer: A
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A cost-justified precaution is a safety measure whose
A) benefits outweigh its costs. B) costs outweigh its benefits. C) costs equal its benefits. D) costs are zero.
In the United States it is clear that if a dollar were diverted from present consumption to present investment, the return on that investment would be ________ to reward the deferral of consumption, meaning that overall economic welfare would rise
with ________ in national saving. A) insufficient, an increase B) insufficient, a decrease C) more than sufficient, an increase D) more than sufficient, a decrease
A country benefits from trade if it is able to obtain a good from a foreign country:
a. that has a very low domestic demand. b. the production of which requires a steady supply of unskilled labor. c. by giving up less of other goods than it would have to give up to obtain the good at home. d. by giving up more of other goods than it would have to give up to obtain the good at home. e. that has a substantial number of substitutes in the domestic market.
A tariff is better than a quota because
a. it does not distort trade as much. b. quotas are inflexible. c. tariffs produce tax revenue. d. quotas hurt domestic producers; tariffs hurt foreign producers.