The law of demand shows that:
A. there is an inverse relationship between price and quantity demanded.
B. the demand curve is positively sloped.
C. when the price of a good increases, the quantity demanded increases.
D. individual demand is the same as market demand.
Answer: A
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Which of the following is a difference between a perfectly competitive market and a monopoly?
A) There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly. B) The sellers in a perfectly competitive market are price makers, while a seller in a monopoly market is a price taker. C) The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue. D) The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.
An effective agreement to divide up the market among firms selling products that are close substitutes
A) allows each firm to earn positive net revenue even though its marginal cost is greater than its marginal revenue. B) allows each firm to earn positive net revenue by preventing cooperation from reducing each firm's marginal revenue below its marginal cost. C) tends to keep each firm's price and marginal revenue above its marginal cost. D) tends to result in both higher prices and larger output.
For many years the United States was able to retain a system for drafting young men into the armed forces because
A) the public feared the menace of Communism. B) patriotism had declined and so volunteers were not available. C) young men were not willing to risk their lives. D) many people adversely affected found it more to their advantage to use some personal escape route than to attack the system directly.
If economies of scale are significant, the typical firm will not reach the minimum point on its long-run average cost curve until it has produced a large fraction of industry sales
Indicate whether the statement is true or false