The principle of comparative advantage does not provide answers to certain questions. One of those questions is
a. Is it possible for specialization and trade to benefit more than one party to a trade?
b. Is it possible for specialization and trade to increase total output of traded goods?
c. Do opportunity costs play a role in people's decisions to specialize in certain activities?
d. What determines the price at which trade takes place?
d
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Refer to Figure 15-8. Use the figure above to answer the following questions
a. Identify the curves labeled A and B. Identify the curve which contains both point Y and point Z. Identify the curve which contains both point V and point W. b. What is the profit-maximizing quantity and what price will the monopolist charge? c. What area represents total revenue at the profit-maximizing output level? d. What area represents total cost at the profit-maximizing output level? e. What area represents profit? f. What is the profit per unit (average profit) at the profit-maximizing output level? g. If this industry was organized as a perfectly competitive industry, what would be the profit-maximizing price and quantity? h. What area represents the deadweight loss as a result of a monopoly?
If a perfectly competitive firm is producing 2,000 units and, at the 2,000th unit, the difference between marginal revenue and marginal cost (MR - MC) is zero, which of the following is true?
A) The firm is maximizing profit. B) The firm should decrease production to maximize profit. C) The firm should increase production to maximize profit. D) The firm should exactly double production to maximize profit.
In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?
a. goods and services b. land, labor, and capital c. dollars spent on goods and services d. wages, rent, and profit
In a 20-firm industry, two of the smallest firms merge. Yet the 4-firm concentration ratio and the 8-firm concentration ratio did not change. All things considered, we can say that the industry has
A. moved farther away from competition because the number of firms decreased. B. moved closer to pure competition because the number of firms decreased. C. experienced no change in competition even though the number of firms decreased. D. to be identified first; otherwise there is no way to tell.