Toby sells wheat in a perfectly competitive market. The demand curve for Toby's wheat is:
A. horizontal.
B. vertical.
C. downward sloping.
D. U-shaped.
Answer: A
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In a recession, demand for cars falls, and the demand curve in the market for cars
A. shifts to the right. B. shifts to the left. C. remains unchanged. D. slows down.
Which of the following statements best describes production outcomes in the Soviet Union and pre-reform China?
A. Output was often high quality but insufficient in quantity because production managers were rewarded only for meeting quality standards. B. Output was generally high quality and sufficient in quantity because of the well-specified economic plans. C. Output was often low quality because production managers were rewarded only for meeting quantitative production targets. D. Output was of variable quality but sufficient in quantity because market signals were only consistent in telling managers how much to produce.
Process innovation can be depicted as:
A. an upward shift in a firm's total product curve. B. an upward shift in a firm's marginal cost curve. C. a downward shift in a firm's marginal revenue curve. D. an increase in product demand.
If a firm in a perfectly competitive market is currently producing the output where price = marginal cost > average total cost, the firm is:
A. earning a positive profit. B. earning a zero profit. C. suffering an economic loss. D. All of these