What conditions must be satisfied if resources are used efficiently?
What will be an ideal response?
Resources are used efficiently when more of one good or service cannot be produced without producing less of some of another good or service that is valued more highly. This is known as allocative efficiency and it occurs when: 1) production efficiency is achieved, and 2) the marginal benefit received from the last unit produced is equal to the marginal cost of producing the last unit.
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If one firm in a duopoly increases its production by one unit beyond the monopoly output, that firm's profit ________, the other firm's profit ________, and the total profit of the duopoly ________
A) increases; increases; increases B) does not change; does not change; does not change C) increases; decreases; does not change D) increases; does not change; increases E) increases; decreases; decreases
Suppose that a firm in an industry subject to diminishing returns to scale is initially in long run equilibrium. Which of the following will not be part of the industry adjustment process to a permanent increase in demand? a. Some firms will temporarily make economic profits
b. Some new firms will enter. c. The long run equilibrium price will be higher than the initial equilibrium price. d. All of the above will be consequences.
Which of the following increases the likelihood that a group of sellers can increase profits as the result of collusion?
a. the presence of a large number of firms in the industry b. intense quality competition among firms c. low barriers to entry into the industry d. a stable demand for the product
What is the Dow Jones Industrial Average (DJIA)? Give a description of why the DJIA was first created, how it is computed, and how it has evolved over time