Which is the best example of a firm's implicit costs?
A) wages
B) the opportunity cost of owner-provided labor
C) rent
D) taxes
Answer: B
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A technological innovation that reduces a firm's marginal cost will lead to:
A. a decrease in the firm's supply. B. an increase in the quantity supplied by the firm, but no change in the firm's supply. C. an increase in the firm's supply. D. a decrease in the quantity supplied by the firm, but no change in the firm's supply.
Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs. What is the relationship between gasoline and SUVs?
What will be an ideal response?
Which of the following is correct for a single-price monopoly?
i. The firm can determine the quantity it produces and the price it charges. ii. It would never profitably produce output in the inelastic range of its demand. iii. Its marginal revenue is less than price. A) i only B) i and iii C) ii only D) ii and iii E) i, ii, and iii
In perfect competition, each firm ________
A) can influence the price that it charges B) produces as much as it can C) is a price taker D) faces a perfectly inelastic demand for its product