Suppose there are two firms in a market: firm A and firm B. Further, assume that they produce a homogenous product at a constant marginal cost of $10. In the Bertrand model solution, firm A will charge a price
A. smaller than firm B.
B. greater than $10.
C. greater than firm B.
D. equal to $10.
Answer: D
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An implication of the downward slope of the demand curve for a monopolistic competitive firm is that
A) its marginal revenue curve slopes upward. B) its marginal revenue curve and its demand curve are identical (same) line. C) its marginal revenue curve slopes downward but lies above the demand curve. D) its marginal revenue curve slopes downward but lies below the demand curve.
The term labor productivity refers to the
a. management time required to manage a unit of output b. maximum number of laborers that a production facility can utilize c. ratio of workers' wage rate to the value of the good d. minimum number of laborers required to produce a good e. quantity of output per laborer per hour
The difference between the spot contract and a forward contract is that:
a. the former is a flexible price on the currency, and the latter is a fixed price. b. the former is a contract to be settled immediately, and the latter is a contract to be settled at a future agreed-upon date. c. the former is a derivative, and the latter is not a derivative. d. the former has a fixed price but the contract can be settled at a later date, and the latter is a contract to be settled immediately.
Questions of exactly where to draw the line on government interference in the economy
A. are best answered by non-economists. B. can be answered easily using the tools of economics. C. are the subject of intense political debate. D. can only be answered through a democratic process.