Buyers and sellers receive information about what should be bought and what should be produced
A) By listening to TV news programs
B) From prices in a market system
C) From newspaper gossip columns
D) From friends and family
Answer: B) From prices in a market system
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Consider the following:
(i) Define the term diminishing marginal returns to labor. When diminishing marginal returns to labor exist, what can be said about the firm's cost curves? (ii) Define the term decreasing returns to scale. When decreasing returns to scale exist, what can be said about the firm's cost curves?
If the marginal cost curve shifts upward, a profit-maximizing, nondiscriminating monopolist is likely to respond in the short run by
a. raising price and increasing output b. raising price and decreasing output c. keeping price constant and increasing output d. reducing price and increasing output e. shutting down
If a firm in an oligopoly is said to face a kinked demand curve, what do you know to be true about the kink?
a. It represents the maximum price and profit. b. It occurs at the only output level where the firm suffers loss. c. It occurs where marginal revenue is zero. d. It is not a characteristic of an oligopoly. e. It occurs at the current price.
Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?