- A profit-maximizing firm will:
A. Hire until workers wages will equal average revenue product.
B. Set its price above marginal cost.
C. Employ capital until the interest rate equals wages.
D. Set its price where marginal cost is equal to marginal revenue.
E. None of the above. - What happens to a perfectly competitive firm’s revenue when it sells additional units of output?
A. It will increase rapidly at first, then decline.
B. It will remain the same.
C. It will increase at a slowly decreasing rate.
D. It will increase at a constant rate.
E. It will rise at an increasing rate. - Which of the following is true if the revenues of orange growers increase when the price of oranges increases?
A. The supply of oranges is elastic.
B. The demand for oranges is elastic.
C. The supply of oranges is inelastic.
D. The demand for oranges is inelastic.
E. The demand for oranges is unitary elastic. - What is a market with an interdependence of firms called?
A. A labor market
B. A monopoly
C. An oligopoly
D. Perfect competition
E. A pure monopoly - Which of the following is a characteristic of an oligopoly?
A. The existence of many firms in the market
B. Only one firm in the market
C. Strategic competition
D. No long-run profits
E. No competition - Which one of the following best describes a perfect competition’s profit?
A. There is no profit.
B. There can be short-run profit, but in the long run, profit is gained at a greater rate.
C. There can be short-run profit, but in the long run, new firms restore revenue.
D. There is no profit in the short run, but there is profit in the long run.
E. None of the above. - Which type of market structure can use price discrimination to its advantage the most?
A. Oligopolies
B. Perfect competition
C. Monopolies
D. Monopolistic competition
E. All of the above
Part III: Microeconomics