Which of the following is a characteristic of monopoly in the long run?
A) The firm makes zero economic profit.
B) The firm can make an economic profit.
C) Price equals marginal cost.
D) Price equals marginal revenue.
B
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Firms in monopolistic competition can achieve product differentiation by
A) expanding plant size. B) exploiting economies of scale in production. C) advertising special characteristics. D) setting the price equal to average revenue.
The principal-agent problem is a problem
A) of the power system of boss and subordinate where the boss (principal) exerts influence over his subordinates (agents) using punishment or threat. B) that exists when a person (principal) has more information about the task than the agent he hires to perform the task. C) caused by agents pursuing their own interests rather than the interests of the principals who hired them. D) caused by a person (principal) who hires an agent to act on his behalf but is unwilling to delegate authority to the agent to carry out the task in the best possible way.
NAFTA is believed to have __________ manufacturing productivity, especially in the maquiladora plants.
a. raised b. lowered c. had no effect on d. greatly hindered
Jane pays the market price of $69 for a new pair of running shoes, even though she would be happy to pay a maximum of $100 for the same pair of shoes. This is an example of the concept of
A. price ceilings. B. producer surplus. C. consumer surplus. D. full economic prices.