Figure 11-6
At its optimal output level, the profit-maximizing monopolist in Figure 11-6 has total costs equal to
A. zero.
B. P2× Q2.
C. P3× Q2.
D. P4× Q3.
Answer: C
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In a competitive industry
a. the industry has high barriers to entry b. the industry has high barriers to exit c. the industry has high barriers to entry and exit d. the industry has no barriers to entry or exit
In long-run full-employment equilibrium, which of the following is true? a. The CPI equals AD equals the peak of the production function curve
b. The horizontal LRAS curve equals the intersection of the demand and supply curves inthe labor market. c. The CPI equals the aggregate production function at the equilibrium wage rates. d. The CPI equals AD equals SRAS equals LRAS.
What is a problem with using a production function of the form Q = aK + bL (a > 0, b > 0)?
A. The marginal products of the inputs do not have diminishing marginal returns. B. MRTS is constant. C. A positive output can be produced when one input is not used. D. both a and b E. all of the above
A significant increase in the price of a consumer good that has suddenly become much more scarce
What will be an ideal response?