We find that the world price of sugar is 20 cents a pound, the U.S. does not trade internationally, and the U.S. equilibrium price of sugar is 30 cents a pound. If the U.S. begins to trade internationally, the price of sugar in the U.S
________ to the world price and U.S. consumers buy ________ sugar. A) falls; more
B) falls; less
C) rises; more
D) rises; less
E) falls; no
A
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Which of the following statements about a monopolistically competitive firm is TRUE?
A) A monopolistically competitive firm does not always equate marginal cost to marginal revenue because it uses other means to maximize profits. B) A monopolistically competitive firm maximizes profits by charging a price equal to marginal cost. C) A monopolistically competitive firm produces the quantity at the point at which the demand curve crosses the marginal cost curve. D) A monopolistically competitive firm maximizes profits when it produces the quantity at which marginal cost equals marginal revenue.
In order for the law of diminishing returns to be present, we must have
a. at least one factor of production to be fixed b. output decreasing as more laborers are hired c. the price of labor increasing as more workers are hired d. simultaneous changes in labor and capital e. double the output when labor input is doubled