The figure above shows a firm in monopolistic competition. If all firms in the industry have the demand and cost curves illustrated in the figure, then in the long run
A) some firms will have exited the industry.
B) some firms will have entered the industry.
C) firms will have neither entered nor exited the industry.
D) we cannot tell if firms will either have entered or exited the industry.
Ques. 2The above table shows the total product schedule for the campus book store. If each employee is paid 6 per hour, what is the average variable cost of selling 83 books per hour (assuming labor costs are the only variable costs of production)?
A) 0.43 per book
B) 0.07 per book
C) 2.30 per book
D) 6.00 per book
Ques. 3If penalties are imposed only on buyers (but not on sellers) of marijuana, the equilibrium price of marijuana ________, and the equilibrium quantity of marijuana sold ________.
A) rise; increase
B) rise; decrease
C) fall; increase
D) fall; decrease
Ques. 4The combinations of gasoline and coffee along one of Sam's indifference curves are combinations
A) which require the same total expenditure.
B) that he can afford with his 60.00 income.
C) among which he is indifferent.
D) that give him the same marginal rate of substitution.
Ques. 5Banks hold 100 percent of their customers' deposits as reserves. Is the previous statement correct or not?
What will be an ideal response?
Ques. 6If a market is shared equally by 100 firms, the Herfindahl-Hirschman Index is
A) 1/100.
B) 1/50.
C) 50.
D) 100.
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