What is the relationship among the following variables for a perfectly competitive firm: the market price, average revenue and marginal revenue?
A) As a firm lowers the market price to sell more output, marginal revenue and average revenue will be less than the market price.
B) Average revenue is equal to marginal revenue; average revenue is greater than the market price.
C) The market price is equal to both average revenue and marginal revenue.
D) Average revenue is equal to the market price; average revenue is greater than marginal revenue.
C
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If a government determines that the provision of services by museums should be encouraged, then this means that the government has judged museum displays to be a(n)
A) government-sponsored good. B) exclusive good. C) government-inhibited good. D) public good.
If, as a perfectly competitive industry expands, it can supply larger quantities at the same long-run market price, it is
A) a constant-cost industry. B) an increasing-cost industry. C) a decreasing-cost industry. D) a fixed-cost industry.
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.
Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow.
Figure 2.2Refer to Figure 2.2. If Microland's economy is at Point B, it could produce more capital goods
A. by sacrificing some consumer goods. B. only with technological improvements. C. without sacrificing any consumer goods. D. only with additional resources.