A constant-cost industry is one in which
A. output increases lead to productivity gains.
B. there is no change in long-run per-unit costs, even as output varies.
C. each firm has a horizontal long-run average cost curve.
D. the marginal product of labor is constant.
Answer: B
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If a 1 percent change in the price of a good causes a 1 percent change in the quantity demanded of that good, then the demand is said to be:
a. perfectly elastic. b. income elastic. c. unit-elastic. d. inelastic. e. perfectly inelastic.
Oligopolists seldom change prices, because they don’t like change.
Answer the following statement true (T) or false (F)
In the case where a natural monopoly exists in an industry,
a. a competitive market structure will be costly and difficult to maintain. b. a competitive market structure will be more efficient and more equitable. c. government regulations will always improve efficiency in this industry. d. economies of scale will not be a consideration when analyzing the proper structure of the industry.
The two factors that determine the size of the multiplier are the
A. unemployment rate and the inflation rate. B. marginal propensity to consume and the amount of overseas leakage. C. amount of imports and the amount of exports. D. amount of spending and the number of jobs.