A monopolist restricts output and charges a higher price relative to what would occur if a market were perfectly competitive.
a. True
b. False
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QUESTION 2Trade between industrial countries account for the majority of international trade.
a. True
b. False
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QUESTION 3If a firm is minimizing the cost of producing its chosen level of output, the marginal product of the last dollar spent on each input should be equal.
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QUESTION 4The opportunity cost of going to movies is the price of entry into the movies.
a. True
b. False
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QUESTION 5A welfare loss occurs when a monopolist chooses not to produce units of output that are of greater marginal value to consumers than the marginal cost of producing them.
a. True
b. False
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QUESTION 6The principle of comparative advantage states that a country should specialize in the production of those goods that have the highest opportunity costs.
a. True
b. False
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QUESTION 7The cost of two inputs A and B are 100 and 200 per unit per month. A firm can afford to invest 10,000 per month on these inputs. The firm uses 30 units of A. Given a linear isocost such that the entire budget is exhausted, the firm will use 10 units of B.
Indicate whether the statement is true or false
QUESTION 8A firm's accounting profit is always equal to or greater than its economic profit.
a. True
b. False
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QUESTION 9The welfare loss from monopoly is not really a loss to society as a whole, since it is just a transfer from consumers to producers.
a. True
b. False
Indicate whether the statement is true or false