A limit on the amount of strawberries that can be imported into the United States is an example of
A) the rationing function of prices protecting domestic strawberry farmers.
B) a price floor set by the government.
C) a price ceiling set by government.
D) an import quota.
Answer: D
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Which of the following accurately describes a major difference between a monopolist and firms in perfectly competitive markets?
a. The monopolist maximizes profit; firms in perfectly competitive markets maximize sales b. The monopolist may earn long-run economic profit; firms in perfectly competitive markets cannot. c. The monopolist is a price taker; firms in other markets are price searchers. d. The monopolist may earn short-run profit; firms in perfectly competitive markets cannot.
In a simple economy (no government sector), the equilibrium level of GDP will be less than the full employment level of income if, at the full employment level of income, the
A. saving that consumers want to do is less than investing that businesses want to do. B. saving that consumers want to do is greater than investing that businesses want to do. C. saving that consumers want to do is less than spending that consumers want to do. D. inventories are being depleted.
Opportunity cost
What will be an ideal response?
Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC) and that the market price is expected to rise at least to ATC in the near future. In the short run, a firm that is a price taker would
a. immediately shut down and get out of the industry. b. continue to produce a quantity such that marginal revenue equals marginal cost. c. shut down temporarily, in hopes of restarting in the near future. d. cut price and expand output in hopes of achieving economies of scale