Suppose that a firm can produce its output at either of two plants. If profits are maximized, which of the following statements is true?
A) The marginal cost at the first plant must equal marginal revenue.
B) The marginal cost at the second plant must equal marginal revenue.
C) The marginal cost at the two plants must be equal.
D) all of the above
E) none of the above
D
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The results of human action but not of human design
a. have traditionally led to anarchy b. can easily be converted into collective decision-making c. have frequently evolved over time into self-enforcing social institutions d. is in actually the result of planned education funding
Which of the following serves to protect a monopoly structure?
a. appearance of close substitute goods b. creation of technologies that serve to break down barriers to entry c. continuing exclusive access to resources required to produce the good d. easier access to resources required to produce the good e. diseconomies of scale
If we assume that the income elasticity of demand for food has been around 0.2 and that agricultural producers have become increasingly more productive, we can conclude that
A) prices of food have increased. B) supply increases have been less than demand decreases. C) as consumers' real incomes have been increasing over the years, they have been spending absolutely less on food. D) prices of food have been stable. E) none of the above
Applied to trade in two goods between two countries, the principle of comparative advantage does not suggest that
a) a nation with an absolute disadvantage in producing both goods will have a comparative advantage in producing one of them b) the two nations will specialize in the production of different goods c) both nations will equally benefit from trade d) consumption possibilities will exceed production possibilities after trade e) each nation will import the good whose opportunity cost of production is higher at home than abroad