Biology Forums - Study Force

The daily vegetable market is an example of an oligopoly market structure.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

What is productive efficiency? Does it guarantee that markets are operating efficiently?

QUESTION 3

Workers in industrial countries earn much higher wages than workers in developing countries because:
 a. the industrial countries are labor rich and capital poor economies.
  b. the industrial countries lack a steady supply of unskilled laborers.
  c. the industrial countries produce labor intensive goods.
  d. the marginal productivity of labor is low in the industrial economies.
  e. the marginal productivity of labor is high in the industrial economies.

QUESTION 4

A tax accountant categorizes costs in conformity with rules of the Securities and Exchange Commission and the Financial Accounting Standards Board so that investors can better compare the records and prospects of different companies.
  Indicate whether the statement is true or false

QUESTION 5

Under an oligopoly market structure, rival firms take completely independent decisions.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 6

What would be the long-run equilibrium result of output expansion in a decreasing-cost industry?

[Answer to ques. #1]  FALSE

[Answer to ques. #2]  Productive efficiency requires that firms in an industry produce goods and services in the least costly way. Productive efficiency alone does not guarantee that markets are operating efficiently. Society must also produce the goods and services that society wants most. This requires that a competitive market achieves allocative efficiency.

[Answer to ques. #3]  e

[Answer to ques. #4]  F

[Answer to ques. #5]  FALSE

[Answer to ques. #6]  An expansion in the output of a decreasing-cost industry can lead to a reduction in input costs and shift the MC and ATC curves downward, and the market price falls. Effectively, a firm experiences lower cost as an industry expands. The new long-run market equilibrium has more output at a lower price. The long-run supply curve is downward sloping.