Refer to the diagrams. Assume that only wheat can be grown on the three grades of land shown in Figures (a), (b), and (c). Also assume that identical amounts of labor, capital, and other needed inputs are used in farming each grade of land. On the basis of these three figures, we:
A. can say that the land in Figure (a) is most productive.
B. can say that the land in Figure (b) is most productive.
C. can say that the land in Figure (c) is most productive.
D. cannot compare the productivity of the three grades of land.
C. can say that the land in Figure (c) is most productive.
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Which of the following could be true of perfect competition but not of monopoly?
a. The government licenses production of the good to a few firms. b. The government grants a patent for the good. c. A firm can earn economic profit in the long run. d. If price falls below average variable cost, it pays to shut down. e. There are no barriers to entry.
As one moves down a straight-line, down-sloping demand curve, price elasticity will:
a. change from elastic, to unit elastic, then to inelastic. b. remain the same between any two points. c. change from inelastic, to elastic, then to unit elastic. d. change from unit elastic, to elastic, then to inelastic. e. change from elastic, to inelastic, then to unit elastic.