If a monopoly is maximizing profits,
a. price will always be greater than the elasticity of demand.
b. price will always equal marginal cost.
c. price will always be greater than marginal cost.
d. price will always equal marginal revenue.
c
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Use the following graph showing short-run cost curves for a perfectly competitive firm to answer the next question.
At what price would the firm earn a normal profit and break even?
A. P1 B. P2 C. P3 D. P4
When the price of a normal good falls, then:
a. both the income and substitution effects combine to cause the quantity demanded to increase. b. the substitution effect will cause people to buy more because the good is relatively less expensive. c. the income effect will cause people to buy more because of the increased purchasing power associated with the lower price. d. all of these.
If a nation has a higher level of technology than another nation it can produce:
A. more outputs with the same level of physical capital. B. less with the same amount of physical capital. C. more with no use of human capital. D. the same output with the same level of inputs.
The table below shows the number of labor hours required to produce one umbrella and one bushel of corn in the United Kingdom and the rest of the world. If the United Kingdom and the rest of the world begin to trade with each other, the international price of corn will lie between ________ and Labor hours to make:In the United KingdomIn the Rest of the World1 umbrella3.002.001 bushel of corn1.000.25
A. three umbrellas per bushel of corn; eight umbrellas per bushel of corn. B. 1/8 of an umbrella per bushel of corn; 1/3 of an umbrella per bushel of corn. C. 1/8 of an umbrella per bushel of corn; eight umbrellas per bushel of corn. D. 1/3 of an umbrella per bushel of corn; three umbrellas per bushel of corn.