Which of the following will occur as the price of a good decreases?
A) The demand curve for that good will shift to the left.
B) The demand curve for that good will shift to the right.
C) The quantity demanded for that good will increase.
D) Demand for that good will increase.
C
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Why are isoquants negatively sloped?
A) Along a single isoquant, the firm can substitute the use of one input for another while holding the total level of output constant. B) Due to the effects of diseconomies of scale. C) Because the farther the isoquant is from the origin, the higher the level of output. D) Because price and quantity demanded are inversely related.
Which of the following is true? a. At the natural rate of unemployment, the economy is considered to be at full employment
b. At full employment, the economy is producing at its potential output. c. If unemployment is greater than its natural rate, the economy is producing at less than its potential output. d. All of the above are true.
Laissez-faire is an economic:
A. theorem because it is the logical conclusion of a model with carefully stated relationships among variables. B. precept because it is the logical conclusion of a model with widely held assumptions. C. theorem because it is based on deductive analysis of a model that is based on assumptions. D. precept because it is based on a model and normative judgments about the relevance of the model to the real world.
If a purely competitive firm is producing at some level less than the profit-maximizing output, then:
A. price is necessarily greater than average total cost. B. fixed costs are large relative to variable costs. C. price exceeds marginal revenue. D. marginal revenue exceeds marginal cost.