A firm's cost can decrease for each of the following reasons, EXCEPT:
a. an increase in productivity due to experience.
b. an improvement in productivity of capital employed.
c. an improvement in work environment and quality of management.
d. an increase in input prices.
QUESTION 2Commercial policy is a government policy aimed at influencing:
a. the operation of commercial banks.
b. domestic trade flows.
c. domestic private corporations.
d. international trade flows.
e. the operation of capital markets.
QUESTION 3If the price of the output produced by a perfectly competitive firm increases, then:
a. the marginal-cost curve will shift up.
b. the demand curve faced by the firm will shift to the left.
c. marginal cost will fall as output declines.
d. the marginal-revenue curve for the firm will shift up.
e. the marginal-cost curve for the firm will shift down.
QUESTION 4Which of the following is generally true of monopoly?
a. Price exceeds marginal cost.
b. Marginal revenue is less than price.
c. Output is restricted relative to the socially efficient level.
d. All of the above are generally true of monopoly.
QUESTION 5The usage of computers on a large scale facilitated widespread changes in organizations in the twentieth century. Given this, which of the following statements will be true?
a. The LRAC of a firm operating with the old organizational structure is likely to be lower than the firms with the new structure.
b. After adopting a new organizational structure that can effectively manage large-scale operations, a firm is likely to have lower LRAC whose minimum is at a higher output.
c. The LRAC of a firm with a new organizational structure will be higher and to the right of a firm operating with the old organizational structure.
d. After adopting a new organizational structure that can effectively manage large-scale operations, a firm's LRAC is likely to shift downward to the left.
QUESTION 6The simultaneous import and export of goods in the same industry by a particular country is known as interindustry trade.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Suppose a perfectly competitive firm's total revenue is equal to 210 and its output is 70 units, when its marginal-cost curve intersects the marginal-revenue curve. What is the marginal revenue earned by the firm?
a. 15
b. 3
c. 30
d. 7
e. 70
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