Factors of production are traded in the product market.

Does a person who works in a brothel sell productive services?

A) Yes, if the service is demanded. B) Yes, but only in states where brothels are legal. C) No, because the service is immoral. D) No, because the service does not help the overall economy.

Which of the following would not be expected to occur in a purely competitive market in long- run equilibrium?

A. Consumer and producer surplus will be minimized. B. P = MC = lowest ATC. C. The maximum willingness to pay for the last unit equals the minimum acceptable price for that unit. D. We would expect all of these to occur in the long run in a purely competitive market.