The downward-sloping demand curve of a monopolistic competitor:
A. reflects product differentiation.
B. ensures that the firm will produce at minimum average cost in the long run.
C. indicates collusion among the members of the product group.
D. becomes horizontal in the long run.
Answer: A
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In a perfectly competitive market, if market price is higher than the average total cost of production, ________
A) firms will incur losses in the long run B) firms will make profits in the long run C) new firms will enter the industry D) firms will exit the industry
Multiple levels of government are desirable because _____
a. different governmental activities are best undertaken by governments of different sizes b. many governmental activities can only be financed if taxed at multiple levels of government c. multiple levels of government provide sufficient bureaucracy to deal with the complex problems faced by today's governments d. government could not be financed adequately without local governments doing the majority of the work ensuring compliance with the tax system
Both screening and signaling:
A. are ways to decrease information asymmetry between two parties. B. correct inefficiency in the market. C. can increase surplus gained in a market. D. All of these statements are true.
Which of the following indicates that economies of scale have been overridden by other factors?
a. A company seeking to save on architect's fees during its move to Maryland copies the same building it used in San Francisco, so now it occupies the only office in Baltimore built to withstand earthquakes. b. The workers on the night shift at the Roadkill Diner, having no customers of their own, peel 400 potatoes, fill 300 catsup bottles, fry 100 pounds of bacon, and brew 80 quarts of coffee for the morning shift. c. Denny's Restaurant serves potatoes with its breakfasts nationwide, but in the South you can get grits instead. d. The Creepy Critters Summer Camp decides not to give campers a choice between hamburgers and hot dogs but makes creamed chipped beef on toast for everybody. e. Henry Ford said that his customers could have any color car they wanted, as long as they wanted black.