Under perfect competition, at the profit-maximizing level of output:
a. price is greater than marginal revenue.
b. price is equal to marginal revenue.
c. marginal revenue is equal to zero.
d. the marginal revenue curve is upward sloping.
e. the average revenue curve is upward sloping.
b
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One reason why adverse selection problems arise in health insurance markets is that
A) sick people are more likely to want health insurance than healthy people. B) because of advances in medical technology, people are living longer. These medical advances are costly and drive up the price of insurance for everyone. C) fewer men and women are choosing medical careers because of the increase in the cost of malpractice insurance. D) the average age of citizens of the United States has increased in recent years, and will continue to increase over the next 20 to 30 years. As older citizens retire, more and more of their medical bills will have to be paid by younger workers.
A production function in which the inputs are perfectly substitutable would have isoquants that are
A) convex to the origin. B) L-shaped. C) linear. D) concave to the origin.