Which of the following is not a characteristic of a perfectly competitive market structure?
a. The firm is a price-taker.
b. The firm is a profit maximizer.
c. The firm's demand curve is horizontal.
d. The market demand is downward sloping.
e. The firm can earn an economic profit in the long run.
E
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Stan owns a software design business. He obtained a bank loan to buy computer equipment for his business. He pays $1,000 per month for interest on the loan. He has 10 employees, each of whom is paid $4,000 per month. Because his business has been
successful, next month he will increase employee wages to $5,000. If the revenue from his business remains at its current level, Stan is considering an addition to his office. Which of the following statements regarding Stan's business is false? A) The payments Stan makes to his employees are variable costs and explicit costs. B) The monthly payment Stan makes for his bank loan is an implicit cost. C) The monthly payment Stan makes for his bank loan is a fixed cost. D) The addition Stan is considering to make to his office would be an implicit cost.
When the opportunity cost of producing carrots increases as more carrots are produced, then:
A. no more carrots will be produced. B. resources are equally suited to the production of carrots and to other goods. C. the production possibilities curve is a straight line. D. the law of increasing opportunity costs is present