Refer to Figure 15-2. If the firm's average total cost curve is ATC2, the firm will
A) suffer a loss.
B) break even.
C) make a profit.
D) face competition.
B
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If competing price searchers adjust their own prices on the basis of a close monitoring of their rival's prices,
A) all prices will tend to be the same, which proves prices are not competitive. B) all prices will tend to be the same, which proves sellers are not competing on price. C) each price searcher's demand curve will be indeterminate. D) prices will fluctuate regularly. E) prices will rise when costs increase but will not fall when costs decrease.
A union may negotiate limits on workload in order to increase the demand for labor and raise workers' salaries. This practice is known as:
a. featherbedding. b. human capital formation. c. monopsonistic bargaining. d. artificial demand stimulus.
Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 are satisfied. Furthermore, assume that X is a normal good, Y is an inferior good, and the price of good Y decreases. Then, which of the following effects is known with certainty?
A. The income and substitution effects will have competing effects, leading to an indeterminate impact on the consumption of good Y. B. The income and substitution effects will reinforce one another, leading to an overall increase in the consumption of good X. C. The income and substitution effects reinforce one another leading to an overall decrease in the consumption of good X. D. The income and substitution effects will reinforce one another, leading to an overall decrease in the consumption of good Y. E. The income and substitution effects will reinforce one another, leading to an overall increase in the consumption of good Y.
If the consumption of a good yields external benefits, then
A. The social demand is greater than the market demand. B. The social demand is less than the market demand. C. The social demand is equal to the market demand. D. There is neither social demand nor market demand for the good.