Which of the following is an assumption used by Classical economists?
A. Wages adjust upward but not downward.
B. Wages are inflexible.
C. Wages adjust downward but not upward.
D. Wages adjust both upward and downward.
Answer: D
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Use the figure below to answer the following question.
If actual production and consumption occur at Q1 and the price is P1
A. deadweight loss equals area b. B. producer surplus equals area c + b. C. consumer surplus equals area a + b. D. consumer surplus equals area a.
The theory of creative destruction implies that too much competition leads to monopolies
Indicate whether the statement is true or false
If four firms comprise the entire golf club industry, the market would be
a. competitive. b. characterized by interdependence of firms. c. a duopoly. d. a monopoly.
Economic profit is defined as the difference between:
a. total revenue and total explicit cost. b. total revenue and total implicit cost. c. explicit costs and implicit costs. d. total revenue and total costs, both explicit and implicit.