An increase in the price of an input will increase the _____ of producing the final good and shift the supply curve of the commodity _____.
a. marginal cost; upward
b. transaction cost; upward
c. marginal cost; downward
d. transaction cost; downward
QUESTION 2The most heavily traded category of goods in the world is:
a. office and telecom equipment.
b. chemicals.
c. iron and steel.
d. textiles.
e. crude petroleum.
QUESTION 3A monopolist faces the least price-elastic demand curve because:
a. the consumers have only one place to buy the good.
b. the monopolist produces a standardized product.
c. the monopolist undertakes a huge expenditure to produce the product.
d. the monopolist supplies to an insignificant portion of the market.
e. the monopolist produces an absolutely necessary good having close substitutes.
QUESTION 4In short run equilibrium in a perfectly competitive industry whose firms are earning economic profits, a firm:
a. has no incentive to change its output.
b. has no incentive to change its plant size.
c. has no incentive to expand its factory.
d. has no incentive to leave the industry.
QUESTION 5As observed in China's steel appliance market, the rise in the price of refrigerators resulted:
a. solely from an increase in the demand for refrigerators.
b. from an increase in the demand for steel from all appliance industries.
c. from a shortage of steel in the world markets.
d. from an increase in the price of steel that was the result of increased demand for refrigerators.
QUESTION 6Countries tend to export different goods and services because of:
a. differences in their comparative advantage.
b. differences in their tastes and technological needs.
c. differences in income.
d. similarities in resource endowment.
e. differences in the exchange rates.
QUESTION 7The demand curve faced by a perfectly competitive firm is:
a. perfectly inelastic.
b. relatively elastic.
c. unit elastic.
d. perfectly elastic.
e. relatively inelastic.
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