Which assumption leads to an efficient allocation of resources among firms?
A. Firms behave so as to minimize their profits.
B. Factor markets are open and competitive.
C. All firms pay different prices for identical inputs.
D. All of the above are correct.
Answer: B
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Marginal utility is negative when total utility is increasing
a. True b. False Indicate whether the statement is true or false
Refer to the following graph. 
The additional profit that might be achieved by monitoring a lazy monopolist with ATC (X-inefficient) is equal to the area of rectangle:
A. A minus rectangle B minus the cost of monitoring. B. A plus rectangle B minus the cost of monitoring. C. A minus the cost of monitoring. D. B minus the cost of monitoring.
Which two groups of decision makers are included in the simple circular-flow diagram?
a. markets and government b. households and government c. firms and government d. households and firms
A "decrease in the quantity demanded" means that
A) the demand curve has shifted to the right. B) the supply curve has shifted to the left. C) price has declined and consumers therefore want to purchase more of the good. D) price has increased and consumers therefore want to purchase less of the good.