The figure illustrates Sally's budget line and her preferences. At point(s) ________, the marginal rate of substitution is equal to the relative price.
A) B
B) B, C, and E
C) D
D) E and C
Ques. 2In the long run, for a perfectly competitive market, if economic profit is
A) less than zero, then some firms will exit the market and the market supply curve will shift leftward.
B) greater than zero, then some firms will enter the market and the market supply curve will shift rightward.
C) equal to zero, then there is no entry or exit of firms into or out of the market.
D) All of the above answers are correct.
Ques. 3The above table gives Sue's marginal utility schedules for sub sandwiches and Mountain Dew, the only products Sue consumes. Suppose the price of a sub sandwich is 4 each and the price of a Mountain Dew is 2 each. Sue's income is 12.
If Sue is at a consumer equilibrium, she eats ________ sub sandwich(es) and drinks ________ Mountain Dews. A) 0; 6
B) 1; 4
C) 2; 2
D) 3; 0
Ques. 4The table above gives information about the labor market in Lantis, a community in which the labor market is perfectly competitive. The equilibrium wage rate is ________ an hour and the quantity of labor employed is ________ hours per day.
A) 5; 600
B) 25; 200
C) 15; 400
D) None of the above answers is correct.
Ques. 5Compared to a competitive industry, a monopoly transfers
A) deadweight loss away from producers to consumers.
B) deadweight loss away from consumers to producers.
C) producer surplus to consumers.
D) consumer surplus to producers.
Ques. 6The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output
A) is achieved.
B) can be achieved by giving paper producers a subsidy.
C) can be achieved by imposing a Pigovian tax on paper producers.
D) cannot be achieved.
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