Which of the following is the best example of an investment in human capital？
a. on-the-job training received by an apprentice electrician
b. an increase in the number of hours worked per week by an unskilled laborer
c. the purchase of company stock by a worker
d. payments into a retirement pension plan by a skilled laborer
Which of the following could be a perfectly competitive market?
d. the market for electricity cars
c. the market for patented pharmaceuticals
a. the market for licensed electricians
b. the market for restaurants with permits to sell alcohol
e.none of the above
If a firm has no ability to influence the market price of its product, it:
b. is a price-maker.
a. will go out of business due to losses.
d. has a horizontal individual demand curve.
c. cannot maximize profit.
A monopolist always faces a demand curve that is:
b. perfectly elastic.
a. perfectly inelastic.
d. the same as the entire market demand curve.
c. unit elastic.
A firm's demand curve for labor coincides with the:
b. average cost curve.
a. marginal cost curve.
d. marginal revenue product curve.
c. marginal revenue curve.
The demand for the product of a competitive price-taker firm is:
c. greater than zero but less than one.
b. perfectly elastic.
a. perfectly inelastic.
d. dependent on the availability of substitutes for the firm's product.
If the wage rate is fixed at a certain level, the:
b. labor supply is a straight upward sloping line.
a. labor supply curve is horizontal.
d. labor supply will increase at an increasing rate.
c. MP must be constant.
A monopoly firm can sell its fourth unit of output for a price of $250. To sell more than five units, it must expect to receive a price:
c. less than $250.
d. equal to $340.
a. equal to $250.
b. greater than $250.
As new firms enter a monopolistic competitive industry, it can be expected that:
a. market price will increase.
b. the output of existing firms will increase.
c. profits of existing firms will increase.
d. profits of existing firms will decrease.
Exit of existing firms will occur in a monopolistic competitive industry until:
a. marginal cost equals zero.
b. marginal revenue equals zero.
d. economic profit equals zero.
c. marginal revenue equals marginal cost.
. If a firm equates MR and MC, then:
b. output is at a maximum.
a. TR is at a maximum, and TC is at a minimum.
d. profits are at a maximum or losses are at a minimum.
c. both TR and TC are at a maximum.
Which of the following is true in long-run equilibrium for both perfect competition and monopolistic competition?
a. Economic profit is positive.
b. Marginal cost equals price.
c. Long-run average cost is at a minimum.
d. Economic profit is zero.
Perfect competition and monopolistic competition are similar because under both market structures,
b. production takes place at the least-cost combination.
a. there are many firms.
c. differentiated products are produced.
d. entry is difficult.
Which of the following can shift the labor demand curve to the right?
b. increase in wages
a. decrease in product price
c. increase in productivity
d. decrease in the marginal product
7. The automobile, steel, and oil markets are all examples of:
a. perfectly competitive markets.
b. monopolies.
c. monopolistically competitive markets.
d. oligopolies.
What is the key feature shared by all oligopoly markets?
a. a large number of sellers
b. mutual interdependence
d. easy entry and exit
c. product differentiation
According to the payoff matrix, which of the following is true?
(A) If Pam sets the high price, Tara will do best by charging the low price.
(B) If Pam sets the low price, Tara will do best by charging the high price.
(C) The dominant strategy for both is to charge the high price.
D) The dominant strategy for Tara is to set the low price and for Pam is to set the high price.
(E) Neither Tara nor Pam has a dominant strategy.
Which of the following statements about cost is always true for both monopolies and perfectly competitive firms?
(C) Average fixed cost is equal to marginal cost when average fixed cost is a minimum.
(A) Average total cost equals marginal cost when average total cost is a minimum.
(B) Marginal cost decreases as production increases.
(E) Average variable cost decreases as production increases.
(D) Average variable cost is equal to marginal cost when marginal cost is a minimum.
(F) price takers
A firm in a perfectly competitive market:
b. must reduce its price if it wants to sell a larger quantity.
a. must take the price that is determined in the market.
d. can exert a major influence on the market price.
c. must be large relative to the total market.
which of the following could have caused the shift in labor demand from D1 to D2?
a. Increase in the demand for the product.
b. Decrease in wages.
c. Decrease in price of product.
d. Decrease in demand for the product.
If more and better technology is used for producing wheat in the United States than in a lesser-developed country, then the:
c. demand for the U.S. workers will be lower than the demand for the workers in the lesser-developed country.
a. MRP of the U.S. workers will be higher than the MRP of the workers in the lesser-developed country.
b. MRP of the U.S. workers will be lower than the MRP of the workers in the lesser-developed country.
d. price of wheat will be higher in the United States than in the lesser-developed country.
An increase in demand for french fries will cause equilibrium wage rates:
d. to fall and quantities of potato workers hired to rise.
b. and quantities of potato workers hired to fall.
c. to rise and quantities of potato workers hired to fall.
a. and quantities of potato workers hired to rise.
Under perfect competition, which of the following are equal at all levels of output?
b. price and marginal revenue
a. price and marginal cost
d. marginal cost and short-run average total cost
c. marginal cost and marginal revenue
If marginal cost exceeds marginal revenue, a profit-maximizing monopolist will:
a. restrict output to increase the price even higher.
c. lower price and expand output to increase profit.
d. attempt to maintain this position because it is consistent with profit maximization.
b. raise price and expand output to increase profit.
If a firm increases output when MR > MC, then:
b. profit will increase.
a. profit will equal zero.
d. profit will remain the same.
c. profit will decrease.