The no-trade equilibrium in a monopolistic market occurs where:
a. marginal revenue = price.
b. marginal cost = marginal revenue.
c. market demand = market supply.
d. marginal cost = average revenue.
Answer: b. marginal cost = marginal revenue.
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For a monopsony the labor supply curve
A) does not exist. B) is the marginal product of labor curve. C) is the marginal cost of labor curve. D) lies below the marginal cost of labor curve.
A firm's ______ connects all the input combinations with the same price.
A. cost function B. isoquant C. budget constraint D. isocost line
If output is above its natural rate, then according to sticky-wage theory
a. workers and firms will strike bargains for lower wages. In response to the lower wages firms will produce less at any given price level. b. workers and firms will strike bargains for lower wages. In response to the lower wages firms will produce more at any given price level. c. workers will strike bargains for higher wages. In response to the higher wages firms will produce less at any given price level. d. workers and firms will strike bargains for higher wages. In response to the higher wages firms will produce more at any given price level.
Which statement is an objection of using the Consumer Price Index (CPI) to measure changes in the cost of living?
A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket. B. The inflation rate is always understated due to substitution bias.