1. In a duopoly where products are differentiated and firms charge different prices, the demand curves are _______________ than if the firms sell identical products at the same price.
A. steeper
B. farther to the right
C. more elastic (flatter)
D. less elastic
2. Which of the following is NOT an assumption of monopolistic competition?
A. Each firm's product is slightly different from other firms in the industry.
B. There are many firms in the industry.
C. Production occurs with increasing returns to scale technology.
D. Each firm faces a perfectly elastic (horizontal) demand curve.
3. In the two-sector (manufacturing and agriculture) specific-factors model, which resource(s) is (are) transferable between sectors?
A. land
B. labor
C. capital
D. labor and capital
4. The specific-factors model is termed a “short-run” model because:
A. labor cannot move from one activity to another.
B. land resources can move from one activity to another.
C. labor can move from one activity to another.
D. land and capital cannot move from one activity to another.
5. What does the specific-factors model allow us to analyze?
A.the returns to factors of production
B.the allocation of the mobile factor between sectors
C.both A and B are correct
6. In the specific-factors model, as more labor is added to a sector, we will see:
A. the total product of labor decrease.
B. the marginal product of labor increase.
C. the average product of labor stay constant.
D. the marginal product of labor decrease.
7. If the price per bushel of wheat is $3 and the marginal product of labor is 4 bushels per hour, then what is the hourly nominal wage?
A. $0.75
B. $1.33
C. $12
D. 4 bushels of wheat