##### Click on the correct option. Text colour will change into green if your chosen option is corret and if it is wrong, it will change into red:

- A firm operating in perfectly competitive product and input markets maximizes its total profits when
- \({P_x} = M{C_x}{\rm{ and M}}{{\rm{C}}_x}{\rm{ is rising}}\)
- \(\frac{{M{P_a}}}{{{P_a}}} = \frac{{M{P_b}}}{{{P_b}}}\)
- \(\frac{{M{P_a}}}{{{P_a}}} = \frac{{M{P_b}}}{{{P_b}}} = \frac{1}{{M{C_x}}}\)
- \(\frac{{M{P_a}}}{{{P_a}}} = \frac{{M{P_b}}}{{{P_b}}} = \frac{1}{{M{C_x}}} = \frac{1}{{{P_x}}}\)
- If input A is the only variable input for a perfectly competitive firm in the product market, the firm’s demand curve for input A is given by its
- VMP
_{a}curve - MP
_{a}curve - MRC
_{a}curve - none of the above
- In order to get the demand curve for a firm for one of several variable inputs, we must consider
- the internal effect of the change in the input price
- the external effect of the change in the input price
- monopolistic exploitation
- monopolistic exploitation
- Consideration of the external effect of a fall in the input price will make the market demand curve of the input
- vertical
- more elastic than otherwise
- less elastic than otherwise
- will have no effect on the elasticity of the market demand curve for the input
- When the market supply curve of input A (S
_{a}) is positively sloped - QS
_{a}is fixed regardless of P_{a} - D
_{a}alone determines the equilibrium P_{a} - the intersection of D
_{a}and Sa determines the equilibrium P_{a}but not the equilibrium Q_{a} - the intersection of D
_{a}and Sa determines both the equilibrium P_{a}and Q_{a} - When S
_{a}has zero (price) elasticity - QS
_{a}is fixed regardless of P_{a} - the D
_{a}curve alone determines the equilibrium P_{a}(given the level at which QS_{a}is fixed) - the entire payment received by input A is a rent
- all of the above are true
- Quasi-rent is
- equal to the firm’s total profit
- greater than the firm’s total profits
- smaller than the firm’s total profits
- any of the above is possible
- When input A is the only variable input for an imperfect competitor in the product market, the firm’s demand for input A is given by its
- VMP
_{a}curve - MRP
_{a}curve - MFC
_{a}curve - none of the above
- When all firms using input A are monopolists in their respective product markets, D
_{a}is obtained by a consideration of the firms’ MRP_{a}curves and - the internal effects only of a change in P
_{a} - the external effects only of a change in P
_{a} - either the internal effects or the external effects
- both the internal and the external effects
- The \(MR{C_a} > {P_a}\) when the firm is
- a monopsonist
- an oligopsonist
- a monopsonistic competitor
- all of the above
- When \(VM{P_a} > MR{P_a} > {P_a},\) we have
- monopolistic exploitation
- monopsonistic exploitation
- both monopolistic and monopsonistic exploitation
- neither type of exploitation
- The general condition for profit maximization for a firm under any form of organization in the input and product markets is
- \(\frac{{M{P_b}}}{{{P_b}}} = \cdot \cdot \cdot = \frac{{M{P_n}}}{{{P_n}}} = \frac{1}{{M{C_x}}} = \frac{1}{{P{}_x}}\)
- \(\frac{{M{P_a}}}{{{P_a}}} = \frac{{M{P_a}}}{{{P_a}}} = \cdot \cdot \cdot = \frac{{M{P_b}}}{{{P_b}}} = \frac{{M{P_n}}}{{{P_n}}} = \frac{1}{{MC{}_x}} = \frac{1}{{M{R_x}}}\)
- \(\frac{{M{P_a}}}{{MR{C_a}}} = \frac{{M{P_b}}}{{MR{C_b}}} = \cdot \cdot \cdot = \frac{{M{P_n}}}{{MR{C_n}}} = \frac{1}{{M{C_x}}} = \frac{1}{{M{R_x}}}\)
- all of the above

## No comments:

## Post a Comment