Which of the following is not a source of monopoly?
a. technologies that allow each of many small firms to produce at the same per-unit costs as one large firm
b. patents
c. control of crucial inputs
d. government licensing requirements
QUESTION 2The export supply and import demand curves measure the domestic shortage and surplus, respectively, at different world prices.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3A firm uses two inputs, labor (L) and capital (K) in the production of umbrellas. It can invest 50,000 in the purchase of the two inputs annually. The firm hires 5 units of capital at 1,000 per unit. If the going annual wage rate is 4,500, calculate the number of workers employed by the firm. (Assume that the firm spends the entire budget on K and L.)
a. 10
b. 5
c. 15
d. 9
QUESTION 4A perfectly competitive firm's pricing decision depends on:
a. whether the firm wants to maximize profits or not.
b. whether the firm wants to maximize sales revenue or not.
c. the firm's costs.
d. whether it wants to compete with other firms in the market or not.
e. the market supply and demand.
QUESTION 5Which of the following can serve as a barrier to entry?
a. legal restrictions
b. patents
c. control of scarce inputs or resources
d. all of the above
QUESTION 6An isocost line depicts:
a. the minimum cost required to produce a certain level of output, given input prices.
b. the input combination to produce a certain level of output.
c. the input combinations that satisfy a budget constraint, given input prices.
d. the maximum output that can be produced by a firm given its budget constraint.
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