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Even though they may harm themselves cutting lettuce with a knife, suppose more people decide they want to eat lettuce salads. As a result, the price of lettuce ____ and the quantity ____. A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases.
In the long run, a firm in perfect competition ____ make an economic profit and in the long run, a firm in monopolistic competition ____ make an economic profit. A) can; can B) can; cannot C) cannot; can D) cannot; cannot.
If one perfectly competitive wheat farmer increases his or her production of wheat, then the market price of wheat A) rises. B) does not change. C) falls. D) more information is needed to answer the question.
The supply of roses is unit elastic and the demand for roses is elastic. If a tax is imposed on roses, who pays a larger part of the tax? A) Demanders pay a larger part of the tax. B) Suppliers pay a larger part of the tax. C) Demanders and suppliers pay equal amounts of the tax. D) More information is needed about whether the tax is imposed on buyers or sellers. E) More information is needed about the magnitude of the tax to determine if demanders or suppliers pay a larger part of a tax.
If a perfectly competitive market becomes a monopoly, then the producer ____ and consumers ____. A) is unaffected; are unaffected B) is unaffected; lose C) gains; gain D) gains; lose E) gains; are unaffected 16) If the demand for a good increases, the demand for the factors used to produce the good A) increases. B) decreases. C) stays the same. D) could increase, decrease, or stay the same.
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