Which of the following would result from a technological advance in a perfectly competitive market?
a. The market demand curve will shift rightward.
b. Consumers will benefit as the price declines.
c. Producers will benefit as long-run profits rise.
d. The market supply curve will shift leftward.
e. In a constant-cost industry, the price will not change in the long run.
B
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In a common-value auction
a. No bidder knows what the exact value of the item being auctioned b. Each bidder knows the exact value of the item c. The value is different for each bidder d. All of the above
Consider the accompanying diagram, which shows an investor who can choose to hold the risky assets on the efficient set and/or the risk-free asset labeled R.
(i) Describe the portfolio held by this investor.
(ii) Suppose the expected return of the risk-free asset increases. Complete the diagram to show how the investor responds to this change. Describe how the market portfolio changes, and describe the new portfolio held by the investor.
(iii) Assume that as the investor's income rises, he prefers that his portfolio have a higher expected return and a lower standard deviation. When the expected return of the risk-free asset rises, does the expected return of the investor's portfolio rise or fall? Does the standard deviation of the investor's portfolio rise or fall? Explain, using substitution and income effects.
To maximize profit, an unregulated natural monopoly will produce at a level where:
A. marginal revenue is greater than marginal cost. B. marginal revenue is greater than average revenue. C. marginal revenue is less than marginal cost. D. marginal revenue is equal to marginal cost.
If you got a new job and moved to Terre Haute, Indiana (population 60,000), you would expect to find ten grocery stores (two Walmart Supercenters, three Krogers, a Meijer, two IGA affiliates, and two independent grocery stores). The market form is
A. oligopoly. B. monopoly. C. perfect competition. D. monopolistic competition.