Suppose that Figure 7.5 shows an industry's market demand, its marginal revenue, and the production costs of a representative firm. If the industry was perfectly competitive, it will produce a quantity of ________ and charge a price of ________.
A. 35; $65
B. 50; $50
C. 70; $30
D. There is not sufficient information.
Answer: C
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According to this Application, international statistics show that the developing countries are ________ and the developed countries are ________
A) creditors; creditors B) creditors; debtors C) debtors; debtors D) debtors; creditors
From 1950-1970, labor productivity growth in the Soviet Union was driven primarily by
A) capital accumulation. B) population increases. C) total factor productivity. D) Capital, population increases, and total factor productivity contributed about equally to labor productivity growth.
If firms in a monopolistically competitive industry experience short-run losses
A) some firms would like to exit the industry but find they cannot. B) firms increase prices further, until they make at least a normal return. C) firms increase advertising spending to increase demand, until they make at least a normal return. D) some firms exit the industry, causing the demand curves for the remaining firms to shift to the right until they earn a normal profit.
The No Marginal Improvement Principle tells us that, at the best choice:
A. the marginal benefit of the last unit must be at least as large as the marginal cost and the marginal benefit of the next unit must be no greater than the marginal cost. B. marginal cost and marginal benefit of the last unit must always be equal. C. the marginal benefit of the last unit must be at least as large as the marginal cost and the marginal benefit of the next unit must be greater than the marginal cost. D. small changes in the level of an activity will always increase net benefit.