The figure above shows a labor market. If this labor market is perfectly competitive, employment is
A) 0 hours per week.
B) 50 hours per week.
C) 100 hours per week.
D) 150 hours per week.
Ques. 2One benefit of monopolistic competition over perfect competition is
A) economic profit.
B) product variety.
C) excess capacity.
D) efficiency.
Ques. 3The ________ effect can be divided into the ________ effect and the ________ effect.
A) marginal; substitution; price
B) income; substitution; price
C) substitution; price; income
D) price; substitution; income
Ques. 4Limit pricing is a strategy which is intended to deter entry into an industry.
Indicate whether the statement is true or false
Ques. 5If a firm is achieving economic efficiency it must also be achieving technological efficiency.
Indicate whether the statement is true or false
Ques. 6The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource. A quota to prevent the overuse of the cod sets the catch equal to ________.
A) 0 tons per week
B) 300 tons per week
C) 400 tons per week
D) None of the above answers is correct.
Ques. 7If the demand for KFC chicken is price inelastic, a fall in the price of KFC chicken will raise the total revenue.
Indicate whether the statement is true or false
Ques. 8Insurance companies charge a lower premium to drivers who carry a higher deductible because
A) insurance companies are not profit maximizers.
B) a driver's riskiness decreases as the driver's deductible increases.
C) a high deductible signals a high risk.
D) insurance companies prefer that drivers carry no deductible.
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