economics data bank

Complete each statement.

1. The demand for labor is considered to be _________________ because it is preconditioned by the

demand for the end product that labor produces.

2. In perfectly competitive factor market the price of the factor equals _____________________.

3. A factor exhibits _______________________ if the increase in output generated from an additional unit

of input decreases as the quantity of the input increases.

4. If prisoners’ dilemma game is played once, the ___________________ for both players is to confess.

5. If a group of oligopolists fail to collude the price will be lower than the price under ________________ but higher than the price under ______________.

6. ___________________ firms produce at less than efficient scale and charge prices in excess of marginal cost.

7. A _____________________ is a firm whose business requires so large initial fixed cost that its average total cost curve continually declines at least to the quantity that satisfies the entire market.

8. The height of the supply curve at any quantity is equal to the seller’s __________________.

9. An increase in price will increase total revenue if the demand is ______________.

10. If Europeans import cars, it is because the _____________________ of producing them elsewhere is lower than in Europe.

True/False

Indicate whether the statement is true or false.

____ 11. The principle of comparative advantage states that, regardless of the price at which trade takes place, everyone will benefit from trade if they specialize in the production of the good for which they have a comparative advantage.

____ 12. An increase in the price of pizza will shift the demand curve for pizza to the left.

____ 13. The willingness to pay is the maximum amount that a buyer will pay for a good and measures how much the buyer values the good.

____ 14. Although economists and accountants treat many costs differently, they both treat the cost of capital the same.

____ 15. The economic field of industrial organization examines how firms’ decisions about prices and quantities depend on the market conditions they face.

____ 16. In order to calculate the value of the marginal product of labor, a manager must know the marginal product of labor and the wage rate of the worker.

____ 17. When two goods are perfect complements, the indifference curves are right angles.

____ 18. A profit-maximizing firm in a competitive market will increase production when average revenue exceeds marginal cost.

____ 19. Even with market power, monopolists cannot achieve any level of profit they desire because they will sell lower quantities at higher prices.

____ 20. Monopolistic competition is characterized by many buyers and sellers, product differentiation, and barriers