Table 14.2In Table 14.2, Market 3 would be in equilibrium if buyers believed plums account for:
A. 30% of the market.
B. 40% of the market.
C. 50% of the market.
D. 60% of the market.
Answer: C
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Most innovations in the economy come from
a. many different industries in a few countries. b. a few industries in many different countries. c. many different industries in many different countries. d. a few industries in a few countries. e. a few industries in the United States.
To say that a firm is competitive in the labor market is to say that the firm can choose
a. both the wage it pays its workers and the number of workers it hires. b. neither the wage it pays its workers nor the number of workers it hires. c. the wage it pays its workers, but it cannot choose how many workers to hire. d. the number of workers it hires, but it cannot choose the wage it pays its workers.
Tomato Farms is selling tomatoes in a purely competitive market. Its output is 5000 bushels, which sell for $15 a bushel. At this level of output, the marginal cost is $15 a bushel and average total cost is $14.50 a bushel. Should the firm increase
output, decrease output, or not produce? Why? What will be an ideal response?
For a competitive firm, if at least some portion of its short-run average cost curve lies below the price of the product, we can conclude that the firm
A. is earning a profit at the profit maximizing output level. B. is incurring short-run losses. C. is earning zero economic profits. D. is going to shut down.