If a firm can maximize its profit by producing the output where price is equal to its marginal cost, the firm is operating in:
A. a perfectly competitive market.
B. an oligopolistic market.
C. a monopolistic market.
D. a monopolistically competitive market.
Answer: A
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When economic growth occurs, the
A) economy moves along its production possibilities frontier. B) production possibilities frontier shifts outward. C) production possibilities frontier becomes steeper. D) production possibilities frontier shifts outward but no longer limits the amount that can be produced.
An increase in default risk on corporate bonds ________ the demand for these bonds, but ________ the demand for default-free bonds, everything else held constant
A) increases; lowers B) lowers; increases C) does not change; greatly increases D) moderately lowers; does not change
The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that
a. consumers are not aware of airline prices. b. consumer demand is unrelated to prices. c. consumer demand becomes more elastic as departure time approaches. d. consumer demand becomes less elastic as departure time approaches.
Which of the following statements is true?
A) Monopolists are price makers. All other firms are price takers. B) Unlike other industries, monopoly industries have high barriers to entry. C) Only monopoly firms are granted patents and copyrights. D) Unlike other firms, a monopolist's demand curve is the same as the market demand curve.