Which of the following is true of perfect competition but not true of monopoly?
a. The firm's average total cost curve is U-shaped.
b. Marginal revenue is equal to price.
c. A profit-maximizing firm chooses output where marginal revenue equals marginal cost.
d. Profits may exist in the short run.
Ans: b. Marginal revenue is equal to price.
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The "Superbowl Effect" mentioned in your textbook is considered a fallacy or a mistake in reasoning because it's wrong to believe
A) one event always causes another to happen if it comes before the other. B) if you gain, I must lose. C) the whole must always be equal to the sum of its parts. D) what is true in one society will always be true in all societies. E) whatever goes up must come down again.
A speculator who incorrectly anticipates the future
A) cannot inflict a loss on others because one person's loss must be someone else's gain. B) incurs a personal loss but benefits everyone else. C) inflicts a loss on others and incurs a personal loss. D) makes a personal profit but inflicts a loss on others.
A firm's marginal cost can always be thought of as the change in total cost if
A) the firm produces one more unit of output. B) the firm buys one more unit of capital. C) the firm's average cost increases by $1. D) the firm moves to the next highest isoquant.
The expected level of shirking or opportunistic behavior by an agent:
A. is always zero. B. is always less than zero. C. can always be determined accurately. D. is always greater than zero.