Suppose a perfectly competitive firm faces the following cost and revenue conditions: ATC = $25.50; AVC = $20.50; MC = $25.50; MR = $28.50. The firm should
A. shut down.
B. continue to produce its current output.
C. increase output.
D. decrease output.
Answer: C
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A monopolistically competitive market is described as one in which there are
A) a large number of firms selling similar, but not identical, products. B) one large firm and many small firms producing identical products. C) a few firms producing an identical product. D) a few firms producing differentiated products.
The transitional gains trap is a _____
a. by-product of some types of regulation b. associated with the move from a socialist to a market society c. associated with the move from a communal to a socialist society d. by-product of changing the rate at which capital gains are taxed
Which factor of production accounts for the highest percentage of the income that the production process generates in the United States?
A. Capital B. Natural resource C. Land D. Labor
To an economist, a single market is associated with
A. a single group of closely related products. B. a specific building where trade takes place. C. all goods traded in a specific geographic region. D. all buyers living in a specific geographic location.