Which of the following does not hold true for a perfectly competitive firm in long-run equilibrium?
A) Marginal cost will be minimized. B) It will minimize average total cost.
C) Its economic profit will be zero. D) It will charge a price equal to marginal cost.
A
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________ occurs when an individual has no incentive in paying for a good because failure to pay does not prevent consumption
A) A free-rider problem B) The paradox of thrift C) A tragedy of the commons D) The paradox of plenty
If countries have similar factors of production and similar productivities, most of their trade is likely to be intraindustry
Indicate whether the statement is true or false
One reason that a large share of the trade between high-income industrial economies is intraindustry trade is because
A) it is more advantageous than interindustry trade. B) high-income industrial economies produce in the first stage of the product cycle. C) high-income industrial economies have dissimilar resource endowments in absolute terms. D) it allows firms to take advantage of internal economies of scale.
What did Harvard economist Edward Chamberlain say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost?
A. Chamberlain argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs. B. In Chamberlain's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention. C. Chamberlain argued that these higher costs represent the wastefulness of this market structure. D. According to Chamberlain, this cost difference represents the value consumers place on variety and having more choice.