Monopolies differ from perfectly competitive firms in the long run because
a. perfectly competitive firms can earn economic profit
b. monopolies can earn economic profit
c. monopolies produce a smaller share of the industry output
d. patents and copyright laws protect monopolists for as long as they desire
e. monopolists have long-run average cost curves
B
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With expansion in the level of output, total fixed cost:
a. declines but remains positive. b. increases. c. falls to zero. d. remains constant. e. becomes negative.
Assume a perfectly competitive firm sells its output for $150 per unit. At its current 2,000 units of output, marginal cost is $180 and increasing, and average variable cost is $160 . Assuming it wants to maximize its profits, it should: a. increase output
b. decrease output, but not shut down. c. maintain its current output rate. d. shut down.
Which of the following correctly describes the federal budget?
a. The federal budget is a plan that describes Fed's monetary policy for the current financial year. b. The federal budget is an aggregate profit and loss statement for all of the nation's business firms. c. The federal budget is the sum of the spending plans of the 50 states. d. The federal budget is a plan for federal government outlays and revenues for a specified period, usually a year.
Which of the following profit functions exhibits a Leontief production function?
A. ? = P × (3K + 4L) ? 20L ? 35K B. ? = P × (3K0.5 + 4L0.5)1/0.2 ? 20L ? 35K C. ? = P × min(2L, 5K) ? 20L ? 35K D. ? = P × K0.75L0.50 ? 20L ? 35K