.1 1. Which of the following statements about perfect oornpetition is false?
0A) In the short run, the number of rms in the industry is xed.
B) Each rrn determines the price at which it will sell its output.
0 C) All rms in the industry produce a standar
No matter how large the loss, a rm should always stay open in the short run if its total revenue is sufcient to cover the total
variable oost of production.
0 A) Tme
O 0) False
Points Earned: 1.0/1.0
Refer to the data in Figure 871 in the text
1. The restaurant industIy in a large city most closely resembles the market sthctJJre of which of the following?
0 A) perfect competition
B) monopolistic competition
0 C) monopoly
O D) oligopoly with cooperative behavior
0 E) oligopoly without cooperati
Suppose that In the year 2020, the once level In the flctlonal oountry of Gurder Is 100, and the government is
considering whether or not to pursue an expanslonary monetaryr policy The followlng graph shows the possible
Impact of that pollcy in 2021. If t
Examples of monopoly: LG&E, Microsoft and MSD
Barrier to entry and exit: Investment to get into the market does not count as a barrier.
Shut down rule: In the short run, the form should continue to produce if total revenue exceeds variable
GDP (E) is GDP calculated using the expenditure approach. It is the sum of expenditures
on household consumption, government consumption, gross fixed capital expenditure,
changes in inventories and net exports. Net exports are exports minus import
The Role of Price
Economists give prices a special place in this analysis. The DEMAND
CURVE is defined as the relationship between the price of the good
and the amount or quantity the consumer is willing and able to
purchase in a specified time period, gi
supply curve, in economics, graphic representation of the relationship between product price
and quantity of product that a seller is willing and able to supply. Product price is measured on
the vertical axis of the graph and quantity of product supplied
In microeconomics, supply and demand is an economic model of price determination in a
market. It concludes that in a competitive market, the unit price for a particular good will vary
until it settles at a point where the quantity demanded by consumers (a
Nice going! You and Bob, co-owners of the new bluejeans finishing plant, have figured out how
important the selling price is in your decisions about how many pairs of bluejeans to supply. And
you are certainly aware that other determinants of supply are i
Concepts covered: law of supply, fixed and variable resources, fixed and variable costs, law of
diminishing returns, change in technology, change in resource prices.
If you don't know about the demand for goods, please start with the EcEdWeb demand
Bob is really excited about next year at the University, which starts in two weeks! But his parents
just dropped a bombshell: he is going to have to buy all of his own clothes for the fall semester.
(And this is NOT a virtual university!) Oh no, he's neve
Bob managed to increase his income by working a few extra hours. How would this affect the
quantity of jeans he purchased, given the other things that determine his demand? As we figured
out in Part I, with a higher income the number of pairs he'd
GDP can be determined in three ways, all of which should, in principle, give the same result.
They are the product (or output) approach, the income approach, and the expenditure approach.
The most direct of the three is the product approach, which sums th
In economics, elasticity is the measurement of how changing one economic variable affects
others. For example:
"If I lower the price of my product, how much more will I sell?"
"If I raise the price, how much less will I sell?"
"If we learn that a resource
demand curve, in economics, a graphic representation of the relationship between product price
and the quantity of the product demanded. It is drawn with price on the vertical axis of the graph
and quantity demanded on the horizontal axis. With few except