The flatter the slope of the supply curve the lower will be the price elasticity of supply. ...

The flatter the slope of the supply curve the lower will be the price elasticity of supply.
  Indicate whether the statement is true or false

QUESTION 2

Suppose at a certain quantity of output, a firm's average-total-cost curve lies above its demand curve. At this quantity of output, the firm:
 a. is earning negative economic profit.
  b. is earning zero economic profit.
  c. is maximizing profit.
  d. should increase its output to maximize profit.
  e. should reduce output to maximize negative economic profit.

QUESTION 3

If the market demand curve in a perfectly competitive industry shifts right, the demand curve for each existing firm will:
 a. shift up.
 b. shift down.
  c. shift right.
 d. shift left.

QUESTION 4

Tim shifted to a new house closer to his office with his family after receiving a favorable salary review from his employer. Here, the new house can be considered as a normal good.
  Indicate whether the statement is true or false

QUESTION 5

Which of the following results in the superstar effect?
 a. An increase in the minimum wage for sports stars
 b. A decrease in the demand for televisions
 c. A technological improvement due to which a baseball game can be broadcast across the world
  d. A rise in the unemployment rate in the service sector of an economy
 e. A decline in the returns to capital in an economy

QUESTION 6

Suppose that ABC Industries, a perfectly competitive firm, currently produces 500 units of imitation ham spread for a total cost of 1,500 . The marginal cost of the 500th unit is 20, and the marginal revenue of the 500th unit is 15 . To maximize profits, Cheapo Industries should:
 a. continue to produce 500 units.
  b. produce more than 500 units but less than 1500 units.
  c. produce less than 500 units.
  d. produce more than 1500 units.
  e. stop producing at 500 units.

QUESTION 7

William is a wheat farmer and wheat sells in a perfectly competitive market, with an equilibrium price of 5 per bushel. Its marginal revenue:
 a. is greater than 5.
 b. is 5.
 c. is less than 5.
 d. cannot be determined from the above information.