Question

23) 23) If labor is 80 percent of total costs in ind ustry A and 20 percent in industry B, then other things equal, we would expect the elasticity of demand for labor to be A) the same in both industries. B) uncertain since no C) greater in industry A than in industry B. D) greater in industry B than in industry A. general relationship exists between cost shares and elasticities 24) diamonds and increase in the supply of 24) Suppose there is a simultaneous increase in the demand for will diamonds. Which of the following will occur as a result of these simultaneous events? A) The market clearing price may rise, fall, or stay the same, but the equilibrium quantity fall. market clearing price will fall,but the equilibeium quantity may rise, fall or stay the will rise. C) Both the market clearing price and equilibrium quantity D) The market clearing price will fall, but the equilibrium quantity will rise. 25) 25) Unrestricted entry and exit into the market is found in A) monopolistic competition and oligopoly B) perfect competition and oligopoly C) perfect competition and monopolistic competition. D) perfect competition, monopolistic competition and oligopoly 26) 26) In which market structure does a firm have the LEAST influence over the market price? A) Monopolistic competition C) Monopoly B) Oligopoly D) Perfect competition 27 27) Price ceilings are adopted in most cases because A) the government views the current equilibrium price as too high for consumers. B) producers need incentives to produce more of the good or service. C) the government wants to create surpluses. D) the government favors a non-intervention policy 28) 28) Which of the following is an example of a price ceiling? A) Rent controls C) The minimum wage B) Agricultural price supports D) None of the above is correct 29 29) The ability to produce an item at a lower opportunity cost compared with other producers is known as A) productive dominance C) competitive dominance. B) absolute advantage. D) comparative advantage. 30) Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: 30) ATC $6.00, AVC A) shut down. C) increase price $4.00; MC $3.50; MR-$3.50. The firm should B) remain at the same position. D) increase output