Compared to a competitive market

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The difference in production outcomes between monopolistic firms and purely competitive firms is best explained by the fact that:
- A.the profit maximizing output level for monopolists occurs at lower levels of production than for purely competitive firms
- B.monopolists maximize profits by setting output such that marginal revenue exceeds marginal cost
- C.monopolists maximize profits by setting output such that marginal revenue is maximized
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Which of the following statements about the elasticities and absorption approaches to explaining the impact of exchange rate changes on trade deficits is most accurate?
- A.Both the elasticities and absorption approaches consider trade and capital flows
- B.Under the elasticities approach, currency depreciation will result in greater improvement in the trade deficit when either import or export demand becomes more elastic
- C.Under the absorption approach, depreciation of the domestic currency will improve a trade deficit if it increases national expenditures relative to income
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An economist finds the following characteristics for the market for two products, S and T:
Product
Firm s Pricing Power
Concentration Ratio
S
Considerable
High
T
Some
Low
- A.an oligopoly and the industry for Product T is also an oligopoly.
- B.an oligopoly and the industry for Product T is monopolistic competition.
- C.monopolistic competition and the industry for product T is an oligopoly.
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For a firm in perfect competition, the profit maximizing output is 200 tons at a price of $600/ton. If the firm is minimizing the cost of resources, it is least likely that the:
- A.marginal product per unit of labor is 1/3 ton.
- B.marginal revenue product of capital is equal to the price of a unit of capital.
- C.ratio of the marginal output per labor unit to labor units employed is at a maximum.
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The price of milk in a country increases from €1.00 per liter to €1.70 per liter, and the quantity supplied does not change. This suggests the short-run supply of milk in this country is closest to being:
- A.perfectly elastic, meaning elasticity of supply is infinite
- B.perfectly inelastic, meaning elasticity of supply is zero
- C.perfectly inelastic, meaning elasticity of supply is infinite
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Placing a tariff on imports of a good is most likely to decrease:
- A.producer surplus for domestic producers of the good
- B.quantity of the good supplied by domestic producers
- C.quantity of the good demanded in the domestic market
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At the quantities where the marginal cost curve intersects the average variable cost (AVC) curve and the average total cost (ATC) curve, respectively:
- A.AVC and ATC are at their minimum points
- B.AVC is at its minimum point and ATC is increasing
- C.ATC is at its minimum point and AVC is decreasing
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A researcher has determined that a firm's supply function for a good is Qs = -60 + 30P +2.2Psub, where P is the price of the good and Psub is the price of a substitute good. If there are 8 identical suppliers in the market, and the price of the substitute good is 15, the market supply curve is given by:
- A.P-0.04Q + 0.75.
- B.P = 0.0042Q + 0.9.
- C.P = 0.18Q + 1.32.
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When two goods are complements, the cross elasticity of demand is:
- A.positive, and for substitutes the cross elasticity of demand is negative
- B.negative, and for substitutes the cross elasticity of demand is negative
- C.negative, and for substitutes the cross elasticity of demand is positive
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Compared to a competitive market result, a single-price monopolist will most likely:
- A.adopt a marginal cost pricing strategy, which will decrease consumer surplus.
- B.increase price, decrease consumer surplus, and increase producer surplus.
- C.reduce output, create a deadweight loss, and decrease both producer and consumer surplus.
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Compared to a competitive market result, a single-price monopolist will most likely: