Answer the following questions true (T) or false (F)
1. A perfectly competitive firm's marginal revenue curve is downward sloping.
2. Assume that price is greater than average variable cost. If a perfectly competitive firm is producing at an output where price is $114 and the marginal cost is $102, then the firm is probably producing more than its profit-maximizing quantity.
3. Being a price taker, a perfectly competitive firm cannot receive a producer surplus in the short run.
1. FALSE
2. FALSE
3. FALSE
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Which of the following is FALSE about firms organized along functional lines?
a. Workers find it difficult to develop functional expertise b. Workers can easily share information within their division c. They foster the exploitation of economies of scale d. None of the above
Expansionary fiscal policy will result in a ____ price level and ____ employment in the short run.
a. higher; higher. b. higher; lower c. lower; higher. d. lower; lower.
Suppose that over one range of? prices, the absolute value of the price elasticity of demand varies from 15.0 to? 2.5, and over another range of? prices, the absolute value of the price elasticity of demand varies from 1.5 to 0.75. What can you say about total revenue and the total revenue curve over these two ranges of the demand curve as price? falls?
A. In the first case total revenue falls and in the second case total revenue falls. B. In the first case total revenue rises and in the second case total revenue rises. C. In the first case total revenue falls and in the second case total revenue falls and then rises. D. In the first case total revenue rises and in the second case total revenue rises and then falls. E. There is insufficient information to determine the effect on total revenue.
Because resources are scarce, individuals are required to
A) make choices among alternatives. B) improve production but not distribution. C) improve distribution but not production. D) use resources inefficiently. E) sacrifice production but not consumption.