Question

21.

According to microeconomic theory, is it better to layoff lots of workers to cut costs in the short-run or is it better to take a longer-run approach to retrain your workers so that you can enjoy more efficiency and economies of scale in the longer-run? Assume that there is no immediate danger of bankruptcy or other disaster?

Multiple Choice

• The short-run is more important than the long-run at all times no exceptions.

• The long-run is more important than the short-run as long as there is no immediate disaster.

• The best thing to do is flip a coin      

• The only way to answer this question is to use game theory software

22

The demand, marginal revenue and short-run cost curves for monopolistic competition, cartels and oligopolies are all drawn exactly the same as the monopoly market structure. These market structures are all represented by the same identical graph.

True or False

23

As you draw the Average Fixed Cost curve it generally rises higher and higher as production increases.

True or False

26

Price ceilings, wage controls, super-profits taxes and other government regulation usually make the free market more efficient. These policies often help private firms increase their profits.

True or False

Answer 1

21) According to microeconomic theory, is it better to layoff lots of workers to cut costs in the short-run or is it better to take a longer-run approach to retrain your workers so that you can enjoy more efficiency and economies of scale in the longer-run? Assume that there is no immediate danger of bankruptcy or other disaster?

The long run is more important than short run since there is no immediate disaster.

22) The demand, marginal revenue and short-run cost curves for monopolistic competition, cartels and oligopolies are all drawn exactly the same as the monopoly market structure. These market structures are all represented by the same identical graph.

The statement is TRUE.

23) The statement is FALSE since the AFC Curve is downward sloping.

26) Price ceilings, wage controls, super-profits taxes and other government regulation usually make the free market more efficient. These policies often help private firms increase their profits.

The statement is TRUE.

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