Refer to the above table. Which of the following statements is correct?
A. The table follows economic principles because in an increasing cost industry, increases in a variable input will lead to increase in output.
B. The table does not follow economic principles because in an increasing cost industry, increases in a variable input will lead to decrease in output.
C. The table does not follow economic principles because the law of diminishing marginal product predicts that increase in a variable input will eventually lead to an increase in the marginal physical product.
D. The table follows economic principles because the law of diminishing marginal product predicts that increase in a variable input will eventually lead to a decrease in the marginal physical product.
Answer: D
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In monopolistic competition, the entry of new firms
A) shifts existing firms' demand curves rightward. B) shifts existing firms' demand curves leftward. C) only results in a movement along the existing firms' demand curves. D) has no effect on the existing firms' demand curves. E) shifts existing firms' supply curves rightward.
Suppose that 300 bottles of soda are demanded at a particular price. If the price of a bottle of soda rises from that price by 6 percent, the number of bottles of soda demanded falls to 275 . Using the midpoint approach to calculate the price elasticity of demand, it follows that the
a. demand for bottles of soda in this price range is perfectly elastic. b. price increase will increase the total revenue of soda sellers. c. price elasticity of demand for bottles of soda in this price range is about 0.69. d. price elasticity of demand for bottles of soda in this price range is about 1.45.
Which of the following is not one of the ways in which the United States finances a trade deficit?
A. Selling U.S. products to foreigners B. Selling U.S. land and factories to foreigners C. Selling U.S. stocks and bonds to foreigners D. Selling U.S. assets to foreigners
For a perfectly competitive firm, when MC is less than MR
A) the producer has an incentive to expand output. B) the producer has an incentive to decrease output. C) the producer has no incentive to change production. D) economic profits must be positive.