Empirical studies of production suggest that the long-run average cost curve
a. is U-shaped
b. has an inverted L shape
c. is L-shaped
d. is horizontal
e. shows diminishing marginal returns
A
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Which of the following statements is correct?
a. Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers. b. Monopolistic competition is similar to perfect competition because both market structures are characterized by differentiated products. c. Monopolistic competition is similar to oligopoly because both market structures are characterized by strategic interaction between firms in the market. d. Monopolistic competition is similar to perfect competition because both market structures are characterized by perfectly elastic demand curves for firms.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
If the supply of oranges is unit elastic, the price elasticity of supply of oranges is
A. 1.0. B. 0.0. C. -1.0. D. -100.0.
The infant industry argument for protection makes sense if the infant industry is
A. able to compete against foreign firms now, but not in the future. B. not able to compete against foreign firms now, but will be able to in the future. C. not be able to compete now or in the future. D. able to compete now and in the future.