The higher the world price above the domestic no-trade equilibrium, the lesser the quantity of a good exported by a country.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2The market-demand curve for a product in a perfectly competitive market:
a. is horizontal.
b. is downward sloping.
c. is vertical.
d. has elasticity equal to 1.
e. is positively sloped.
QUESTION 3Which of these contributes to the existence of monopoly power?
a. the control of critical resources
b. legal barriers
c. patents
d. All of the above contribute to the existence of monopoly power.
QUESTION 4Jeff owns a garage and has 3 mechanics to help him. With the tools used being fixed in the short run, his production function is given by 5 + 2L = Y , where L is the number of mechanics and Y is the number of cars they can fix. If Jeff hires a fourth mechanic, what will be the marginal product of the new mechanic hired?
a. 11
b. 13
c. 2
d. 7
QUESTION 5If the world price of a good is equal to its no-trade equilibrium price, the country will import more of the good from other nations.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6A perfectly competitive producer's demand curve is:
a. a horizontal line.
b. also the market-demand curve.
c. downward sloping but more elastic than the market-demand curve.
d. a vertical line.
e. upward sloping.
QUESTION 7Barriers that prevent the entry of new firms may arise because:
a. economies of scale exist over a substantial range of industry demand.
b. marginal revenue is less than average total cost.
c. the government protects some firms from competition.
d. of both (a) and (c).
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