Camille's Chicken operates in a monopolistically competitive market. If Camille implements a new free delivery service for customers,
a. this is an example of advertising
b. this is a form of nonprice competition
c. total revenue will increase
d. total cost will decrease
e. her firm will be acting as if it were perfectly competitive market
B
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Which of the following is not a function of prices in a market system?
a. Prices have the crucial job of balancing supply and demand. b. Prices send signals to buyers and sellers to help them make rational economic decisions. c. Prices coordinate economic activity. d. Prices ensure an equitable distribution of goods and services among consumers.
Under which conditions might diseconomies of scale result?
A. improved coordination brought about by bureaucracy B. increasing price of inputs C. increasing output prices D. usage of a large amount of indivisible inputs by the firm
If investors begin to perceive that government bonds being sold to finance a deficit have become more risky, the interest rate the country must pay on its bonds will decrease.
Answer the following statement true (T) or false (F)
The concave shape of a production possibilities frontier showing possible output levels of good A and good B indicates that if the economy produces more and more of good B,
a. larger and larger amounts of good A must be sacrificed b. smaller and smaller amounts of good A must be sacrificed c. more of good A will be produced d. the amount of resources available in the economy must be increased e. there must be an improvement in technology