View the step-by-step solution to:

If two countries have identical opportunity costs, then: one country must be more productive in producing all goods than the other B. the benefits...

  1. If two countries have identical opportunity costs, then:

A. one country must be more productive in producing all goods than the other

B. the benefits resulting from trade are increased

C. there are no gains from specialisation and trade

D. each country should specialise in the production of a particular commodity


  1. In a competitive market, buyers cannot influence the price because:

A. each buyer purchases a small amount of the product

B. each buyer purchases a large amount of the product

C. each buyer is a monopoly

D. prices are determined by advertisers


  1. Suppose that the number of buyers in a market increases and expectations of the price of the good indicate that its price will rise in the future. What would we expect to happen in the market?

A. the equilibrium price would increase but the impact on the amount sold in the market would be ambiguous

B. the equilibrium price would decrease but the impact on the amount sold in the market would be ambiguous

C. both equilibrium price and equilibrium quantity would increase

D. equilibrium quantity would increase but the impact on equilibrium price would be ambiguous


  1. When a firm has market power, it can:

A. sell as much as it wants at any market price

B. control the number of firms that will operate in an industry

C. influence the market price of the good it sells

D. choose to disregard government regulation 


  1. When firms think at the margin and make incremental adjustments to the level of production, they are naturally led to a level of production where:

A. average variable cost exceeds marginal cost

B. costs are minimised

C. profit is maximised

D. total cost is less than average revenue 


  1. Choose the correct statement. In the long-run, each firm in a competitive market with identical firms will:

i) operate at the firm's efficient scale

ii) produce at a point where Marginal Cost and Average Total Cost are equal

iii) will earn zero economic profit

A. (i)only

B. (i)and(ii)only

C. (ii)and(iii)only

D. (i),(ii),and(iii) 


  1. If a profit-maximising firm in a competitive market discovers that at its current level of production, price is less than marginal cost, it should:

A. exit the industry

B. increase its output

C. keep output the same

D. reduce its output 


Top Answer

If two countries have identical opportunity costs, then: C. there are no gains from specialisation and trade In a competitive... View the full answer

CH Perfect Comp LR equilibrium.png

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online