17.2   Output and Price Decisions   1) For a monopolistically competitive firm, the demand curve A) is a horizontal line. B) has a positive slope. C) is vertical. D) has a negative slope. E) is the same as the marginal revenue curve. 2) The marginal revenue curve facing a monopolistically competitive firm A) lies on its demand curve. B) lies above its demand curve. […]

  19.4   Chapter Figures   The figure above shows a firm’s VMP curve.   1) Suppose that a new technology doubles the marginal product of the workers and the price of the product does not change. As a result, the value of marginal product of the second worker A) remains $12. B) becomes $6. C) becomes $24. D) becomes $30. E) More information about the […]

  101.The Maroon Apparel company controls the weaving, dyeing, cutting, and sewing of its merchandise. Apart from these activities, it also manufactures buttons, zips, buckles, and other accessories for its apparel. This is done in order to exercise tight control over its manufacturing processes and to reduce production costs. This strategy of the company is known as _____.   A. vertical integration B. unrelated diversification C. horizontal integration […]

  11.3   What Happens to Profits in the Long Run?   1) A monopolistically competitive industry that earns economic profits in the short run will A) continue to earn economic profits in the long run. B) experience the entry of new rival firms into the industry in the long run. C) experience the exit of existing firms out of the industry in the long run. […]

  101) The theory of equal net advantage is a theory concerning A) the demand for factors. B) the supply of factors. C) the marginal product of the factors. D) the production process. E) economic versus accounting profit. 102) A temporary factor-price differential is one which A) will tend to be eliminated in the long run. B) will hamper the reallocation of resources from declining […]

    Figure 1-1     11) Refer to Figure 1-1.  Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2008 and 2011. A) 23.1% B) 23.8% C) 30% D) 42.9%   12) Refer to Figure 1-1.  Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2007 and 2011. […]

    11) Refer to Table 19-3. Select the statement that accurately interprets the data in the table. A) Bryce has an absolute advantage in making candles and Tina has an absolute advantage in making soap. B) Bryce has an absolute advantage in making soap and Tina has an absolute advantage in making candles. C) Bryce has an absolute advantage in making soap. D) Tina […]

        20) Computer memory chips are produced on wafers, each wafer having many separate chips that are separated and sold. The above table shows costs for a perfectly competitive producer of computer memory chips. If the market price of a wafer is $2,400 dollars, how many wafers will the firm produce? A) 0 B) 4 or 5 C) 3 or 4 D) […]

  12.3   The Cost of Inflation 1) High inflation A) leads to a more correct allocation of resources. B) lowers the price level. C) decreases uncertainty. D) makes it easier to use money as a standard of account. E) makes money function less well as a store of value. 2) High inflation makes money ________ because ________. A) function less well as a store of […]

  3.4   Supply in Product / Output Markets   1) According to the law of supply, there is a A) negative relationship between price and the quantity of a good supplied. B) positive relationship between price and the quantity of a good supplied. C) negative relationship between price and the change in supply. D) positive relationship between price and the change in supply.   2) […]