Assume a competitive market has firms earning large economic profits. What is expected to happen over time in this competitive market and to firm's profits?
QUESTION 2Marginal utility is measured by:
a. a ray from the origin to a point on the total utility curve.
b. the change in total utility for a 1-unit change in the quantity consumed.
c. total utility divided by total quantity consumed.
d. the first utility minus the last utility.
e. average utility multiplied by the total quantity consumed.
QUESTION 3What is a firm's short run supply curve?
QUESTION 4The change in total utility due to a 1-unit change in the quantity consumed is:
a. marginal utility.
b. average utility.
c. per capita utility.
d. total utility.
e. the principle of diminishing marginal utility.
QUESTION 5What is the profit maximizing (loss minimizing) quantity for the perfectly competitive firm to produce?
QUESTION 6Marginal utility can be measured by the change in:
a. total utility / the change in quantity.
b. income / the change in utility.
c. quantity / the change in income.
d. price / the change in utility.
e. income / the change in price.
QUESTION 7What are the characteristics of the perfectly competitive market?
QUESTION 8A utility-maximizing consumer would never purchase a good if the:
a. MU/P is positive.
b. marginal utility is positive.
c. marginal utility is negative.
d. none of these is correct.
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