The demand curve of a monopolist is:

The demand curve of a monopolist is:
 a. is identical to the marginal cost curve.
 b. downward sloping and above the marginal revenue curve.
 c. downward sloping and below the marginal revenue curve.
 d. kinked because of recognized interdependence with other firms.

QUESTION 2

In an industry, when the cost curve of a firm is upward sloping at low levels of output relative to the market, it implies:
 a. the industry is characterized by constant returns to scale.
  b. the industry has a high degree of competition.
  c. not many firms can operate together in this industry.
  d. the firm can charge a price lower than competition and still cover its costs.

QUESTION 3

The comparative advantage in a specific good can shift over time from one country to another, as the other countries can produce it at a cheaper cost after imitating the technology.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 4

To maximize profits in the short run, a perfectly competitive firm will produce the output at which:
 a. marginal revenue equals demand.
  b. price equals marginal revenue.
  c. price equals marginal cost.
  d. marginal revenue equals average total cost.
  e. total revenue equals total cost.

QUESTION 5

If the average total cost curve is always above the demand curve of a monopolist:
 a. that monopolist will suffer economic losses.
 b. entry will occur, forcing the monopolist to reduce price and expand output.
  c. the monopolist will earn an economic profit.
 d. the monopolist must be producing inefficiently.

QUESTION 6

The human skills theory is similar to the factor abundance theory of explaining the source of comparative advantage, except that the former concentrates only on different aspects of labor.
 a. True
  b. False
  Indicate whether the statement is true or false