A firm under any market structure maximizes profits at a point where:

A firm under any market structure maximizes profits at a point where:
 a. marginal revenue product is greater than marginal factor cost.
  b. marginal revenue product is equal to marginal factor cost.
  c. marginal revenue product is equal to zero.
  d. marginal factor cost is equal to zero.
  e. marginal revenue product is less than marginal factor cost.

QUESTION 2

In which of the following situations will the price of medical care decrease with an increase in its demand?
 a. When the supply of medical care is the same as the demand for medical care
 b. When there is an increase in productivity as a result of a technological advancement
  c. When there is an increase in the price of resources used to produce medical care
  d. When the supply of medical care increases more than the demand for medical care
  e. When there is an increase in future profit expectations

QUESTION 3

If the total utility for eating up to five 2.00 hamburgers is 40, 60, 70, 75, 70, respectively, which of the following is true?
 a. A rational consumer would choose to eat five hamburgers at the price of 2.00
 b. A rational consumer would choose to eat five hamburgers only if the price was reduced to 1.00.
  c. A rational consumer would choose to eat five hamburgers only if the 5th hamburger as free.
  d. A rational consumer would have to be compensated to eat the 5th hamburger.

QUESTION 4

Under perfect competition in the resource market, the marginal factor cost curve:
 a. is positively sloped.
  b. is vertical.
  c. is negatively sloped.
  d. is horizontal.
  e. does not exist.

QUESTION 5

Which of the following is a possible cause of an increase in the demand for health care?
 a. A young population
 b. A fall in the purchasing power of households
  c. An aging population
 d. A fall in the total population of a country
 e. Technological advancement

QUESTION 6

Jason buys only music downloads and food with his weekly income. In response to a decrease in the price of downloads, he buys more downloads and less food. As a result, we would expect:
 a. the marginal utility of downloads to increase and the marginal utility of food to decrease.
  b. the marginal utility of both downloads and food to remain unchanged.
 c. the marginal utility of downloads to decrease and the marginal utility of food to increase.
  d. the marginal utility of food to become negative.

QUESTION 7

If the resource market is perfectly competitive:
 a. the market demand for the resource is perfectly elastic.
  b. the market demand for the resource is perfectly inelastic.
  c. the suppliers can affect the input price by increasing or reducing their supply.
  d. the input price to each firm is constant.
  e. the supply of the resource is perfectly inelastic.