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242 Cards in this Set
- Front
- Back
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The price-taker firm should discontinue production immediately if:
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the market price is less than the firm's average variable costs.
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Total profit can be calculated by:
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c and e.
subtracting total costs from total revenue. quantity produced times the difference between average revenue and average total cost. |
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If marginal revenue exceeds marginal cost in the short run, the perfectly competitive firm earns an economic profit in the short-run.
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False
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The demand for the product of a competitive price-taker firm is:
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perfectly elastic.
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Perfect competition is defined as market structure in which:
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all of these.
there are many small sellers. the product is homogeneous. it is very easy for firms to enter or exit the market. |
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The long-run equilibrium condition for perfect competition is:
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P = ATC = MR = MC.
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Above the shutdown point, a competitive firm's supply curve coincides with its:
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marginal cost curve.
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Assume that a firm's marginal revenue just barely exceeds marginal cost. Under these conditions the firm should:
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expand output.
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Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000. If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn?
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$10,000.
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A perfectly competitive industry must have a perfectly elastic long-run supply curve.
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False
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In long-run equilibrium, which of the following is not equal to price for a perfectly competitive firm?
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Short-run average variable cost.
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In long-run equilibrium, a perfectly competitive firm will produce an output level at which its long-run average cost curve is upward sloping.
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False
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If input prices for a perfectly competitive firm increase as the output of the industry expand in the long run, the long-run industry supply curve will:
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have a positive slope.
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In a perfectly competitive industry, assume the short-run average total cost increases as the output of the industry expands. In the long run, the industry supply curve will:
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have a positive slope.
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In the short run, the profit maximizing (or minimizing) quantity of output for any firm to produce exists at that output level at which marginal revenue equals marginal cost.
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True
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Which of the following correctly explains why sellers in a perfectly competitive market are price takers?
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There are many sellers, and so the market process generates an equilibrium price that cannot be influenced by any one seller. Thus they have no choice but to take the price generated by the market process.
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A firm is currently operating where the MC of the last unit produced = $84, and the MR of this unit = $70. What would you advise this firm to do?
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Decrease output.
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Which of the following is a key characteristic of the long-run competitive equilibrium that distinguishes it from the short-run competitive equilibrium?
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Free entry to reduce short-run profits, or free exit to reduce short-run losses.
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If a firm is operating at a loss in the short run and finds that its price is greater than average variable cost, then in the short run:
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it should produce where MR = MC.
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Suppose that 1000 identical sellers each set their profit-maximizing output level at 18 units when price equals $10. Then what is market quantity supplied at a price of $10.
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18,000
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Perfectly competitive markets are characterized by:
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firms selling a homogeneous product.
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The long run is a planning period:
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during which the firm can vary its plant size.
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Assume the short-run average total cost for a perfectly competitive industry remains constant as the output of the industry expands. In the long run, the industry supply curve will:
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be perfectly horizontal.
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If a firm is producing an output level at which marginal revenue exceeds marginal cost in the short run, the firm will increase profits by reducing its output level.
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False
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The marginal revenue of a price taker is:
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equal to price.
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Perfect competition is defined as market structure in which:
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all of these.
there are many small sellers. the product is homogeneous. it is very easy for firms to enter or exit the market. |
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The long-run equilibrium condition for perfect competition is:
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P = ATC = MR = MC.
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If at some output level for a firm price exceeds average total cost, then the firm is earning an economic profit.
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True
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If a firm is currently equating MR and MC and product price = $24, AVC = $22, and ATC = $26, then in the long run this firm:
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will go out of business.
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A firm is currently operating where the MC of the last unit produced = $84, and the MR of this unit = $70. What would you advise this firm to do?
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Decrease output.
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If a firm shuts down in the short run, it will:
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incur losses equal to its fixed costs.
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Which of the following is true of a perfectly competitive market?
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All of these.
If economic profits are earned then the price will fall over time. In long-run equilibrium P = MR = SRMC = SRATC = LRAC. A constant-cost industry exists when the entry of new firms has no effect on their cost curves. |
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In a constant cost industry:
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the long-run supply curve will be perfectly elastic.
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A monopoly earns the most profit by charging a price where demand is inelastic.
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False
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Which of the following is true about a monopoly?
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A monopoly charges a higher price and produces a lower output level than if the market were competitive.
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A monopolist earning economic profit in the short run determines that at its present level of output, marginal revenue is $23 and marginal cost is $30. Which of the following should the firm do to increase profit?
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Raise price and lower output.
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Costs in a natural monopoly are lower because there is only one producer.
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True
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A natural monopoly exists whenever economies of scale are very extensive.
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True
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Compared to a perfectly competitive firm with the same cost structure, a monopoly firm will charge a:
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higher price and sell less.
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Using the rule that focuses on the marginal approach to maximizing profits, a monopolist charges a price where the:
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MR = MC.
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A profit maximizing monopolist sets price and output so that it always operates on the elastic portion of its straight-line demand curve when in equilibrium.
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True
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Under both perfect competition and monopoly, a firm:
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maximizes profit by setting marginal cost equal to marginal revenue.
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Graphically, the marginal revenue curve of a monopolist:
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will always lie below the demand curve of the monopolist.
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Which of the following best explains why the monopolist's marginal revenue is less than the selling price?
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To sell more units, the monopolist must reduce price on all units sold.
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What should a profit maximizing monopolist do if she is currently producing where MC < MR?
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Increase output until MC = MR.
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A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.
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False
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Suppose a monopolist and a perfectly competitive firm have the same cost curves. The monopolistic firm would:
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charge a higher price than the perfectly competitive firm.
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A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.
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False
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For a monopolist:
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price is above marginal revenue.
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Which of the following is true for perfect competition, monopolistic competition, and monopoly?
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Short-run profits are maximized when marginal cost equals marginal revenue.
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In the short run, the monopolistic competitive firm will charge a price equal to marginal cost.
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False
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In order from the most to the least competitive market structure is the perfectly competitive, monopolistically competitive, monopolist and then the oligopolistic market structure.
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False
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Cartel agreements are difficult to maintain because individual members:
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are often unable to police the price and output policies of other members.
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Oligopolies have few sellers and difficult entry.
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True
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According to the kinked demand theory, when one firm raises its price, other firms will:
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refuse to follow.
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Costume jewelry is produced in a monopolistically competitive market. One producer finds that MR = MC = $3 when output is 700 necklaces. An economist studying this information can conclude that:
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the producer charges a price greater than $3.
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A profit-maximizing monopolistically competitive firm will expand output to the point where:
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marginal revenue equals marginal cost.
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Which of the following is true about advertising?
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Both a. and b. above are correct.
If monopolistically competitive firms compete through advertising, that creates brand loyalty, then advertising can be an effective entry cost. Advertising may be the only way that a new entrant can penetrate a market dominated by long-established firms. |
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If OPEC is an effective cartel,
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members agree on output quotas.
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An oligopoly:
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all of these.
and monopolistically competitive market produce less and charge higher prices than if their markets were perfectly competitive. is characterized by mutual interdependence of pricing decisions. may be characterized by a kinked demand curve. |
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In monopolistic competition if there is profit, there is:
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a signal for new firms to enter.
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How will the price and output of a monopolist compare with perfect competition?
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The output of the monopolist will be too small and the price too high.
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Cartel pricing refers to the output and price choice of a cartel. This choicemost closely resembles that of a:
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monopoly
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Which of the following statements best describes firms under monopolistic competition?
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In the long run, positive economic profit will be eliminated.
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Video rental stores in cities are an illustration of:
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monopolistic competition.
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In the long-run, surviving firms in monopolistic competition earn:
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zero pure economic profits.
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The landmark antitrust case which established that size alone is not sufficient to prove an antitrust violation is the:
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U.S. Steel case.
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During the first phase of regulation in the United States (from 1887 to the Great Depression), the primary target of regulation was the:
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railroads.
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The Utah Pie case was brought under which of the following laws?
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The Robinson-Patman Act.
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Which of the following mergers would result from the purchase of a retail clothing chain by a computer software company?
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A conglomerate merger.
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If two steel firms decide to merge, this merger would be classified as:
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a horizontal merger.
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A merger between two manufacturers of computers would result in which of the following?
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A horizontal merger.
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Interlocking directorates are illegal under the Clayton Act.
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True
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In which antitrust case did the Supreme Court begin to apply the per se rule to determine whether a firm was in violation of the Sherman Antitrust Act?
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The Alcoa case.
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The antitrust law that prohibits firms from combining or conspiring to restrain trade in interstate commerce is the:
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Sherman Antitrust Act.
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If Microsoft merges with retail stores and computer makers, such that competition is substantially reduced, it would be in violation of the:
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Celler-Kefauver Act.
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A manufacturer will sell its product only to retailers who agree to buy its brand. This is an example of:
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a tying contract.
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Officers of five large building-materials companies meet and agree than none of them will submit bids on government contracts lower than an agreed-upon level. This is an example of:
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price fixing.
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Which of the following is not a type of merger?
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Diversified merger.
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Suppose a steel firm and a cookware company merge. This merger would be classified as:
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a vertical merger.
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A merger of firms that compete in the same market is classified as a conglomerate merger.
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False
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Which of the following is illegal under the Sherman Antitrust Act?
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All of these are illegal under the Sherman Antitrust Act.
Attempts to monopolize. Price fixing. Formation of cartels. |
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What act of Congress declared restraint of trade illegal and declared any attempt at monopolizing unlawful?
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Sherman Antitrust Act.
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Which of the following is concerned primarily with price discrimination?
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The Robinson-Patman Act.
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A local cable company has its rates set at P = $15 by a regulatory commission. Its current output is 10,000 households and its costs are as follows: ATC = $17; AVC = $14; and MC = $15. From this, we can tell that this is:
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marginal cost pricing, and the firm earns an economic loss.
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A merger of firms with a supplier is a:
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vertical merger.
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The Sherman Antitrust Act:
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prohibited restraint of trade.
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For which pair of firms would a merger be horizontal?
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Barnes and Noble and Wordsworth Booksellers
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The government's court case against Microsoft is an example of:
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antitrust enforcement.
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The antitrust legislation that was designed to help small stores survive competition with large retail chains was the:
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Robinson-Patman Act.
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Deficient information on unsafe products can cause:
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all of the above answers are true.
overconsumption of a product. waste of resources used to produce a product. consumers to pay a higher price for a product. |
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In the United States during the 1980s, there was a movement toward deregulation of industry.
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True
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Which of the following is not one of the four anti-competitive activities outlined in the Clayton Act?
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Buying a competitor's plants and equipment.
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Violations of the Sherman Antitrust Act have sometimes been punished by breaking up the offending firm into a number of smaller firms.
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True
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Which of the following was not illegal under the original Clayton Act?
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Merger by purchase of assets with cash.
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Which of the following practices is prohibited by the Clayton Act?
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All of these.
Price discrimination that substantially lessens competition. Tying contracts that substantially lessen competition. Exclusive dealing that substantially lessens competition. |
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If two steel firms decide to merge, this merger would be classified as:
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a horizontal merger.
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The Utah Pie case is an example of a violation of the Celler-Kefauver Act.
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False
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The Sherman Antitrust Act was passed in:
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1890
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Which of the following is illegal under the Sherman Antitrust Act?
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All of these are illegal under the Sherman Antitrust Act.
Attempts to monopolize. Price fixing. Formation of cartels. |
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Interlocking directorates are illegal under the ____ whether or not the effect may be to substantially lessen competition.
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Clayton Act
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Which two pieces of legislation were passed in 1914?
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Clayton Act and Federal Trade Commission Act
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The first major piece of antitrust legislation was:
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Sherman Antitrust Act.
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Interlocking directorates are illegal under the Clayton Act only when their effect is to lessen competition substantially.
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False
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In a competitive labor market, the change in total labor costs divided by the change in labor is always equal to:
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the wage rate.
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A monopsonist will hire fewer workers than will be hired in a competitive labor market.
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True
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In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product exceeds the wage rate.
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True
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The marginal revenue product of a resource:
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equals the extra output produced by an additional unit of the resource multiplied by the price of that output.
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Which of the following statements is true?
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Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production.
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The marginal cost of labor for a perfectly competitive firm is given by:
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the market wage rate.
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If a monopsonist's labor supply curve is positively sloped, the marginal factor cost (MFC) will be below the wage rate.
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False
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A decrease in the price of the output will decrease the firm's demand for labor.
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True
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Which of the following is not true about a monopsonist?
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It can set the wage rate and hire any desired number of workers at that wage.
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The marginal factor cost for a monopsonist is:
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above the market wage rate.
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The MFC curve increases for a monopsonist because:
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as more workers are hired, all workers receive higher wages.
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For a monopsonist:
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wage < MFC
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A monopsonist will hire more workers than will be hired in a competitive labor market.
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False
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Which of the following will decrease the demand for fast-food burger workers' labor?
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The price of pizza, a substitute for burgers, decreases.
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Suppose a monopsonist currently employs 100 workers at a wage of $400 per week. If the firm wants to expand employment to 110 workers, and the 110th worker will only work for $450 per week, what is the approximate marginal factor cost of the 110th worker?
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$950 per week.
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Which of the following most clearly illustrates the concept of derived demand?
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An increase in the demand for new houses leads to an increase in the demand for construction workers.
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Which of the following statements is true about monopsony?
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c, d, and e.
Monopsonists exercise complete buying power. Monopsonists maximize profit by setting MRP = MFC. Monopsonists face the whole labor supply curve. |
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Suppose a monopsonist hires its second worker and this hiring has a marginal factor cost of $75 per day. If the market wage is now $62.50 per day, what was the first employee earning when she worked alone?
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$50.
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A monopsonist will hire more workers than will be hired in a competitive labor market.
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False
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If the wage rate in a monopsonistic industry is $15, the marginal factor cost will be:
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greater than $15.
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Which of the following would cause the demand for labor to change?
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A change in the price of the good produced.
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Which of the following statements concerning the supply of labor is true?
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None of these.
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In a competitive labor market, the change in total labor costs divided by the change in labor is always equal to:
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the wage rate.
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The labor supply curve facing a monopsonist is:
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upward sloping.
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A monopsony will:
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employ a quantity of labor where the marginal revenue product equals the marginal factor cost.
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Marginal revenue product of labor measures the extra revenue generated to the firm from the employment of an additional worker.
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True
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The MFC curve increases for a monopsonist because:
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as more workers are hired, all workers receive higher wages.
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An individual firm in a competitive labor market faces a(n):
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horizontal labor supply curve.
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In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product exceeds the wage rate.
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True
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As compared to a firm that competes for labor, a monopsony will:
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hire fewer workers and pay lower wages.
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When Harlan County, Kentucky, has a monopsony coal mining firm,
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coal miners will only have one employer.
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As a percentage of nonfarm workers, union membership in the United States grew most rapidly since 1945.
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False
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Which of the following statements is true?
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Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production.
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BigBiz, a local monopsonist, currently hires 50 workers and pays them $6 per hour. To attract an additional worker to its labor force, BigBiz would have to raise the wage rate to $6.25 per hour. What is BigBiz's marginal factor cost?
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$18.75 per hour.
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An increase in the demand for a product will shift the demand for labor used to produce the product:
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rightward.
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In a constant cost industry:
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the long-run supply curve will be perfectly elastic.
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Total profit can be calculated by:
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c and e.
subtracting total costs from total revenue. quantity produced times the difference between average revenue and average total cost. |
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In the short run, the supply curve for a perfectly competitive firm is its marginal cost curve for all levels of output.
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False
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A firm in a price-taker market:
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must take the price that is determined in the market.
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Consider a firm operating with the following: price = 10; MR = 10; MC = 10; ATC = 10. This firm is:
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perfectly competitive in long-run equilibrium.
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If a perfectly competitive firm charges more than the market price, then it loses all of its customers.
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True
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In the short run, if a perfectly competitive firm is producing at a price below average total cost, its economic profit is:
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negative.
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Which of the following best explains why a firm in a perfectly competitive market must take the price determined in the market?
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If a price taker increased its price, consumers would buy from other suppliers.
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If a fishing boat owner brings 10,000 fish to market and the market price is $7 per fish, she will have $70,000 in total revenue. If the average variable cost of 10,000 fish is $4 and the fixed cost of the boat is $20,000, what is her profit?
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$10,000.
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Market structure describes which of the following characteristics?
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All of these are true.
The ease of entry into and exit from the market. The similarity of the product sold. The number of firms in each industry. |
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In the short run, a firm will stay in business as long as:
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price exceeds average variable cost.
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In long-run equilibrium, a perfectly competitive firm's short-run marginal cost curve crosses the long-run average cost curve at the lowest point on the long-run average cost curve.
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True
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A sandwich shop owner has the following information: P = MR = $4, ATC = $2, AVC = $1, MC = 4, and Q = 500. From this, she can determine:
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she has earned economic profits of $1,000.
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Which of the following is not a characteristic of the structure of perfectly competitive markets?
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Few sellers.
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The marginal revenue of a price taker is:
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equal to price.
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When the marginal cost of a price-taker firm is more than the market price of its product, the firm should:
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reduce output.
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____ is the act of buying a commodity in one market at a lower price and selling it in another market at a higher price.
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Arbitrage.
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For a monopoly to successfully price discriminate, its customers must:
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be unable to resell the product.
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A profit-maximizing monopolist will continue expanding output as long as:
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marginal revenue exceeds marginal cost.
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Graphically, the marginal revenue curve of a monopolist:
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will always lie below the demand curve of the monopolist.
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Monopolies may earn economic losses in the long run.
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False
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For a monopolist, marginal revenue is always:
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below market price.
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When a monopoly price discriminates, it charges the highest price to the group of buyers with the least elastic demand.
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True
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To maximize its profit, a monopoly should choose a price where demand is:
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elastic
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There is only one gas station within hundreds of miles. The owner finds that when she charges $3 a gallon, she sells 199 gallons a day, and when she charges $2.99 a gallon, she sells 200 gallons a day. The marginal revenue of the 200th gallon of gas is:
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$1.
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A natural monopoly exists whenever economies of scale are very extensive.
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True
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A monopolist can earn an economic profit only when:
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average total cost is less than price.
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|
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The two theoretical extremes of the market structure spectrum are occupied at one end by perfect competition and on the other end by monopoly.
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True
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Price discrimination requires:
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a firm to be able to segment its customers based on different price elasticities of demand.
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Compared to a perfectly competitive firm, a monopolist:
|
all of these.
charges a higher price. produces lower output. fails to achieve an efficient allocation of resources. |
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In contrast to a perfectly competitive firm, a monopolist operates in the long run at a quantity of output at which:
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P > MR.
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For a monopolist, marginal revenue is always:
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below market price.
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In order for a monopolist to earn a pure economic profit in short-run equilibrium, price must exceed average total cost.
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True
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A monopolized market is characterized by:
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all of these.
a sole seller of a product for which there are few suitable substitutes. very strong barriers to entry. a single firm facing the market demand curve. |
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The two theoretical extremes of the market structure spectrum are occupied at one end by perfect competition and on the other end by monopoly.
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True
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Which of the following represents an arbitrage transaction?
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All of the above are example of arbitrage.
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A monopolist always faces a demand curve that is:
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the same as the entire market demand curve.
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One of the necessary conditions for price discrimination to occur is that:
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buyers in different markets have different elasticities of demand.
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At the long-run equilibrium level of output, the monopolist's marginal cost will:
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be less than price.
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A monopoly market is characterized by a single seller of a product which has few, if any, suitable substitutes.
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True
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Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:
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shut down.
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An industry in which total costs are kept to a minimum because only one firm serves the whole market is called a:
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natural monopoly.
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An example of price discrimination is the price charged for:
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theater tickets that offer lower prices for children.
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The monopolist, unlike the perfectly competitive firm, can continue to earn an economic profit in the long run because of:
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extremely high barriers to entry.
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If a monopolist finds that at the present level of output marginal revenue exceeds marginal cost, the firm should:
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expand output.
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A monopolist can earn an economic profit only when:
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average total cost is less than price.
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|
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Which barrier to entry results in the creation of a natural monopoly?
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Economies of scale.
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|
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Which of the following is not associated with the monopoly market structure?
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Many sellers.
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|
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For a monopolist with a downward-sloping demand curve,
|
as price decreases, marginal revenue decreases.
|
|
|
The purpose of antitrust laws is to:
|
reduce anticompetitive activities.
|
|
|
The per se rule was applied in the Alcoa case.
|
True
|
|
|
The Celler-Kefauver Act of 1950 plugged a technical loophole in the Clayton Act which permitted many large horizontal mergers.
|
True
|
|
|
The Clayton Act of 1914:
|
prohibited price discrimination that reduces competition and cannot be justified based on cost differences
|
|
|
The Consumer Product Safety Commission (CPSC) was established in:
|
1972
|
|
|
The Robinson-Patman Act amended and further refined which of the following laws?
|
The Clayton Act.
|
|
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A conspiracy among firms to fix prices was outlawed by the Sherman Antitrust Act.
|
True
|
|
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Antitrust laws in other countries are weak in comparison to U.S. antitrust laws.
|
True
|
|
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When the court determines that a firm's size alone is sufficient to find that it violated antitrust laws, this criterion is called:
|
per se.
|
|
|
In the Utah Pie case, the economic effect of the Supreme Court decision was to:
|
discourage competition by national competitors in the Salt Lake City market.
|
|
|
A retailer cannot sell Campbell Soup if it also sells other brands of soup. This is an example of:
|
exclusive dealing.
|
|
|
Overconsumption of a product can be caused by imperfect information.
|
True
|
|
|
The Federal Trade Commission is charged with:
|
investigating unfair and deceptive trade practices.
|
|
|
It is not possible for a regulated public utility to earn economic profits in the short run.
|
False
|
|
|
Deregulation, especially for the transportation and telecommunication industries, was the trend in the United States during the:
|
1980s.
|
|
|
The antitrust legislation that made it illegal for a firm to pay cash for a competitor's patents, plant, and equipment was the:
|
Celler-Kefauver Act.
|
|
|
It is against the law in the United States for one person to hold positions on more than one board of directors at a time.
|
False
|
|
|
Under the original Clayton Act, which of the following was not illegal?
|
The purchase of the assets of a rival firm that lessens competition.
|
|
|
Ersatz Kreme will sell its filling to Hunky Donuts only if Hunky Donuts agrees not to buy filling from other suppliers. This is an example of:
|
exclusive dealing.
|
|
|
Which of the following mergers would result from the purchase of a computer chip company by IBM?
|
A vertical merger.
|
|
|
Which act of Congress extended the government's authority to block horizontal and vertical mergers?
|
Celler-Kefauver Act.
|
|
|
Under an exclusive buying arrangement, a retailer agrees not to sell a good at the manufacturer's suggested retail price.
|
False
|
|
|
Which of the following practices is prohibited by the Clayton Act?
|
All of these.
Price discrimination that substantially lessens competition. Tying contracts that substantially lessen competition. Exclusive dealing that substantially lessens competition. |
|
|
A merger between a leather supplier and a shoe manufacturer would be classified as a:
|
vertical merger.
|
|
|
Marginal cost pricing is a system of pricing in which the price charged equals the marginal cost of:
|
the last unit produced.
|
|
|
The airline and trucking industries came under regulation during the:
|
1930s
|
|
|
The most important weakness of the Sherman Antitrust Act was that:
|
it wasn't specific about the types of acts which would violate the law.
|
|
|
The rule of reason would have not found a well-behaved, but gigantic, firm to be in violation of the antitrust laws.
|
True
|
|
|
In order to obtain a conviction for price fixing under the Sherman Antitrust Act, the government needs to prove:
|
only that an attempt to fix prices was made.
|
|
|
Which antitrust act prohibits exclusive dealing, tying contracts, stock acquisitions, and interlocking directorates?
|
Clayton Act of 1914.
|
|
|
Competitive firms X, Y, and Z meet in secret and agree to charge the same price. The U.S. Justice Department discovers this agreement and would mostlikely file charges under the:
|
Sherman Act.
|
|
|
Which of the following U.S. antitrust laws prohibits mergers through the acquisition of a firm's assets if the merger would lessen competition?
|
Celler-Kefauver Act.
|
|
|
The Consumer Product Safety Commission (CPSC) was established in:
|
1972.
|
|
|
Which agency was created by Congress in 1914 to investigate and regulate unfair methods of competition?
|
Federal Trade Commission.
|
|
|
In the Utah Pie case, the economic effect of the Supreme Court decision was to:
|
discourage competition by national competitors in the Salt Lake City market.
|
|
|
Overconsumption of a product can be caused by imperfect information.
|
True
|
|
|
The Utah Pie case is an example of a violation of the Robinson-Patman Act.
|
True
|
|
|
It is not possible for a regulated public utility to earn economic profits in the short run.
|
False
|
|
|
If the MRP is less than the wage, the firm should hire more labor.
|
False
|
|
|
The marginal revenue product of a resource:
|
equals the extra output produced by an additional unit of the resource multiplied by the price of that output.
|
|
|
In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product exceeds the wage rate.
|
True
|
|
|
The marginal revenue product of a resource is:
|
the marginal product of the resource multiplied by the price of the product it helps to produce.
|
|
|
One reason the supply of carpenters is greater than the supply of physicians is because:
|
none of the above.
|
|
|
If a monopsony finds that its MRP is greater than its MFC, it:
|
should hire more workers to increase profits.
|
|
|
The number of workers hired by a firm at a particular wage rate can be calculated if you know which of the following?
|
Marginal revenue product of labor.
|
|
|
An increase in demand for French fries will cause equilibrium wage rates:
|
and quantities of potato workers hired to rise.
|
|
|
For a monopsonist, the supply of labor facing the firm is:
|
identical to the supply curve facing the market.
|
|
|
Suppose a monopsonist wants to hire more workers. If it has to pay the same wage to all of its workers, the:
|
wage and the marginal factor cost will increase.
|
|
|
An improvement in technology that increases the marginal product will shift the demand for labor curve to the right.
|
True
|
|
|
A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must:
|
decrease the factor price to hire more.
|
|
|
If product price increases, then:
|
MRP will increase.
|
|
|
A monopsony hires labor up to the point where the marginal revenue product of labor equals the wage rate.
|
False
|
|
|
Which of the following is the best example of an investment in human capital?
|
on-the-job training received by an apprentice electrician
|
|
|
Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive. Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day. The marginal revenue product for the 101st worker is:
|
$500.
|
