Which of the following does not own the factors of production?
(A) Households
(B) The market
(C) Individuals
(D) Firms
Ans: (B) The market
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Moving from one point to another on a production possibilities frontier implies
A) increasing the production of both goods. B) changing the amount of factors of production that are employed. C) decreasing the production of both goods. D) increasing the production of one good and decreasing the production of another. E) holding the production levels of both goods constant.
Which of the following is an advantage to society of monopolistic competition?
A) production at the lowest possible average cost B) product variety C) only essential costs are incurred D) long-run profitability E) The firms have excess capacity so they are are always willing to increase their production.
Suppose the marginal product of labor in the economy is given by MPN = 0.002(16,000 - N), while the supply of labor is 1000 + 1000w
(a) Find the market-clearing real wage rate and level of employment. (b) What happens to the wage rate and employment if wealth rises, reducing the supply of labor to 500 + 1000w? (c) What happens to the wage rate and employment if after wealth has risen as in part (b), there is a productivity shock that increases the marginal product of labor to MPN = 0.0025(16,000 - N)?
Which of the following is true about an oligopoly equilibrium in comparison with equilibrium under similar circumstances but with perfect competition?
a. Output is smaller and price is lower than under perfect competition. b. Output is smaller and price is higher than under perfect competition. c. Output is larger but price is higher than under perfect competition. d. Output is larger and price is lower than under perfect competition.