A corporation is a firm owned by
A) two or more owners who have unlimited liability.
B) a single owner who has unlimited liability.
C) at least 20 stockholders who have partially limited liability.
D) stockholders who have limited liability.
Ques. 2A monopolistically competitive industry has
A) significant barriers to entry.
B) differentiated products.
C) mutually dependent firms.
D) a small number of large firms.
Ques. 3Robinson spends all his income on mangos and bananas. Mangos cost 3 per pound and bananas cost 1 per pound. The marginal utility is 30 for the last pound of mangos purchased and 10 for the last pound of bananas.
To maximize his utility, Robinson should buy A) more mangos and fewer bananas.
B) more bananas and fewer mangos.
C) the present combination of goods.
D) only mangos.
Ques. 4As the quantity of labor increases, value of marginal product for a perfectly competitive firm
A) decreases because the firm must lower its price to sell a larger quantity.
B) decreases because the marginal product of labor decreases.
C) decreases because marginal revenue decreases.
D) is constant because marginal revenue is constant.
Ques. 5The figure above shows Ronald's budget line. He has a weekly income of 20 and he spends it on hot dogs and hamburgers. The relative price of a hamburger is ________.
A) 1/2 hot dog
B) 5 hot dogs
C) 20
D) 2 hot dogs
Ques. 6The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is
A) 10 million.
B) 20 million.
C) 60 million.
D) zero.
Ques. 7The income elasticity of demand is a measure of the responsiveness of the
A) quantity of a good demanded to changes in income.
B) consumer's income to a change in the price of the goods he or she consumes.
C) quantity of a good demanded to changes in its price.
D) quantity of a good demanded to changes in another good's price.
Ques. 8When the marginal product curve is above the average product curve, ________ as output increases.
A) average product must decrease
B) average product must increase
C) marginal product must decrease
D) marginal product must increase
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