Costume jewelry is produced in a monopolistically competitive market. One producer finds that MR = MC = $3 when output is 700 necklaces. An economist studying this information can conclude that:
A. the producer is charging a price of $3.
B. economic profit is $2,100.
C. the producer charges a price greater than $3.
D. new firms will want to enter.
Answer: C
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Given the information in Figure 14.4, the monopsony wage rate is:
A) W1. B) W2. C) W3. D) W4. E) none of the above
Which of the following statements is true of the impact of trade restrictions on domestic employment?
a. Domestic firms will produce the goods that otherwise would have been produced abroad, thus employing foreign workers instead of domestic workers. b. Beside the protected industry, other industries will also benefit in terms of employment. c. Workers in the protected industry migrate to other industries. d. Restrictions imposed on trade redistribute jobs by creating employment in the protected industry and reducing employment elsewhere. e. Minimum wages for skilled and unskilled labor increase in the domestic country.