Which of the following is the primary requirement for a market to be competitive?
a. Low barriers to entry and relatively easy exit
b. A downward-sloping demand curve
c. High barriers to entry
d. A horizontal demand curve
Answer: a. Low barriers to entry and relatively easy exit
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Use Figure 13.1 above to help with the following question. Why is it true that at every level of output except the first unit, the monopolist's marginal revenue (MR) is below price
What will be an ideal response?
Diminishing marginal product of labor occurs when adding another unit of labor
A) increases output by an amount larger than the output added by the previous unit of labor. B) decreases output by an amount smaller than the output added by the previous unit of labor. C) changes output by an amount smaller than the output added by the previous unit of labor. D) decreases output.
Economists now tend to believe that the most productive approach to ending poverty is to
a. make more and better education available b. make sure there is a job for everyone c. provide subsidies to people who earn less than a poverty-level wage d. provide subsidies to businesses to hire poor people e. none of the above
The existence of an inflationary gap or an recessionary gap depends on the
a. aggregate supply only. b. expenditure schedule. c. leakages schedule. d. injections schedule. e. aggregate demand and aggregate supply schedules.