Marginal revenue is equal to price for a perfectly competitive firm because:
A. total revenue increases by the price of the good when an additional unit is sold.
B. total revenue increases by less than the price of the good when an additional unit is sold.
C. firms need to lower price to increase the quantity sold.
D. firms can increase price and still increase the quantity sold.
Answer: A
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Gross domestic product (GDP) measures the
A) number of final goods and services produced in the economy in a given time period. B) number of final goods and services sold in the economy in a given time period. C) market value of old and new final goods and services sold in the economy in a given time period. D) market value of final goods and services produced in the economy in a given time period.
The "Discount Department Stores" industry is highly concentrated. What does this mean?
A) The sales volume in this industry is consistently high. B) There are many large stores such as Wal-Mart, Target, Kohl's, in this industry. C) A few large stores account for a significant portion of industry sales. D) There is cut-throat competition in this industry because there are no entry barriers.
If the production possibilities curve is a downward-sloping straight line, that would indicate
a. that society cannot decide which good it prefers b. an absence of scarcity c. constant opportunity cost d. inefficiency e. specialization
The fact that price subsidies reduce economic surplus implies that:
A. we can find an alternative policy that will make both the rich and the poor better off. B. the quantity bought and sold in the market will fall. C. price subsidies help the rich but not the poor. D. price subsidies are not effective at lowering prices.