Which of the following statements about the perfect competitor is INCORRECT?
A) The perfectly competitive firm is always a price taker.
B) The perfect competitor sells a homogeneous commodity.
C) If an individual firm raises price, it will lose business.
D) The products made by a perfectly competitive firm have no close substitutes.
Answer: D
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Economics can decide
A. the appropriate trade-off between fairness and efficiency. B. which pricing arrangements are fair and which are unfair. C. whether a pricing decision will impose heavy inefficiency costs on society. D. All of the responses are correct.
Suppose a demand schedule is P = 100 - Q and a supply schedule is P = 20 + 2Q. What is the marginal net benefit curve?
a. MNB = 80 - Q b. MNB = 80 - 3Q c. MNB = 80 + Q d. MNB = 120 - Q e. MNB = 120 - 3Q
Higher-income countries tend to have lower levels of absolute poverty because they
a. have more employment opportunities. b. have more public assistance. c. have greater entrepreneurship opportunities. d. All of the above.
Monopolistically competitive firms have downward-sloping demand curves. In the long run, monopolistically competitive firms earn zero economic profits. These two characteristics imply that in the long run
A) monopolistically competitive markets achieve productive efficiency. B) monopolistically competitive markets achieve allocative efficiency. C) monopolistically competitive firms earn economic profits. D) monopolistically competitive firms have excess capacity.