Suppose the firms in a monopolistically competitive market are earning positive economic profits. What will happen to move the market to its long-run equilibrium?
A) The firms' demand curves will become less elastic.
B) The demand curves faced by firms in the market will shift to the right.
C) More close substitutes will appear in the market.
D) Some firms will exit the market if they can't cover all of their fixed and variable costs.
C
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If a firm uses only capital and labor as inputs, then what should the firm do at a given rate of production if the marginal physical product of labor per last dollar spent is lower than the marginal physical product of capital per last dollar spent
A) The firm should increase both the quantity of capital and the quantity of labor. B) The firm should decrease both the quantity of capital and the quantity of labor. C) The firm should increase the quantity of capital and reduce the quantity of labor. D) The firm should decrease the quantity of capital and increase the quantity of labor.
Induced consumption is equal to
A. autonomous C. B. total C. C. autonomous C - total C. D. total C - autonomous C.
Suppose that the income elasticity of demand for good X is greater than 1. Other things being equal, which of the following statements is INCORRECT?
A. Good X is a normal good. B. The quantity demanded of good X decreases as a consumer's income declines. C. A consumer buys more X as income rises, but the share of income spent on good X falls. D. A consumer buys more X as income rises and the share of income spent on good X also rises.
The law of diminishing marginal utility states as the consumption of a particular product increases, marginal utility decreases.
Answer the following statement true (T) or false (F)