Question:

In the short run, a monopolist will shut down if it is producing a level of output wheremarginal revenue is equal to short-run marginal cost and price is

A.

greater than average total cost

B.

less than average total cost

C.

greater than average variable cost

D.

less than average variable cost

Answer» d. less than average variable cost

Question:

If price is equal to average cost, in the short-run, the competitivefirm can earn

A.

Only normal profit

B.

Super normal profit

C.

Loss

D.

All of the above

Answer» a. Only normal profit

Question:

Which method is used by Hicks to eliminate the income effect when price of aproduct is changed

A.

compensating variation in income

B.

the cost difference

C.

the over compensation effect

D.

substituting variation in price

Answer» a. compensating variation in income

Question:

Factors of production are:

A.

the coefficients in a production function

B.

the characteristics of a market that determine how much is produced

C.

the inputs used to produce goods and services

D.

the outputs from a production function

Answer» c. the inputs used to produce goods and services