SAB1101

The the idea that the demand for autoworkers stems from the need for automobiles is

• value of the marginal product of autoworkers.

• derive demand

• indirect demand

• Output demand

Labor and capital are substitutes in production. If labor becomes more educated, then, ceteris paribus

• labor is substituted for capital.

• capital is substituted for labor.

• output decreases as does the rental rate.

• output increases as does the price of the output.

The marginal revenue product of labor is

• the additional revenue the firm makes by selling one unit of labor.

•   the marginal product of capital times the price of labor.

•   the additional profit a firm earns by employing one additional unit of labor.

• the additional revenue a firm earns by employing one additional unit of labor.

The music production industry is an example of a(n)                    industry.

• perfectly competitive

• monopolistic

• oligopolistic

• monopolistically competitive

Predatory pricing is

• generally more effective when barriers to entry exist.

• often effective and a relatively inexpensive means of eliminating competition.

• the practice by which a large, powerful firm attempts to drive its competitors out of the market by temporarily setting an artificially low price.

• legal under the U.S. antitrust laws.

There is the easy entry of new firms into the     industries.

• perfectly competitive and monopolistically competitive

• monopolistically competitive and oligopolistic

• oligopolistic and monopolistic

• monopolistic and perfectly competitive

Monopolistically competitive firms use      to achieve market power

• product differentiation

• their size

• strategic behavior

• predatory pricing

According to the theory of comparative advantage, a country                      the goods in which its has a comparative advantage.

• does not trade

• exports and imports

• exports

• imports

India has a comparative advantage compared to Spain in the production of clothing if

• India can produce clothing at a lower monetary cost than Spain can.

• India can produce clothing using fewer resources than Spain can.

• the demand for clothing is higher in India than in Spain.

• India can produce clothing at a lower cost in terms of other goods than Spain can.

The law of diminishing marginal utility refers to

• a consumerʹs decrease in additional satisfaction as she consumes more and more units of a good.

• a consumerʹs decrease in total satisfaction as she consumes more units of a good.

• the idea that total utility is negative

• the idea that marginal utility is negative