Question

In: Economics

74 Productive efficiency means that the firm is producing at the lowest cost possible. True or...

74

Productive efficiency means that the firm is producing at the lowest cost possible.

True or False

75

Which formula below best describes human behavior?

Multiple Choice

  • MC = MR

  • E > 1

  • E = 1

  • MB = MC

76

Costco, Wal-Mart, and Target probably control over 70 percent of the market share in the large superstore discount retailing industry. The ‘kinked’ demand curve is used to explain this industry is all part of the Monopolistic Competition market structure.

True or False

77

Suppose that Lockheed Martin (the military defense contractor) invented a very sophisticated fighter jet. If they could only sell this advanced plane exclusively to the U.S. government, then the U.S. government would be classified as a monopsony buyer.       

True or False

Solutions

Expert Solution

Answer 1) Productive efficiency occurs when a good or a service is produced at the lowest possible cost. Hence the given statement is True.

2) MB = MR best describes the human behaviour. He will keep on consuming when MB > MC until it becomes equal. And when MB < MC then he will try ti reduce his consumption.

Hence option D is the correct answer.

3) Costco, Wal-Mart, and Target probably control over 70 percent of the market share in the large superstore discount retailing industry. The ‘kinked’ demand curve is used to explain this industry is all part of the Monopolistic Competition market - This statement is False because kinked demand curve is sweezy model which is a part of oligopoly market structure.

4) suppose that Lockheed Martin (the military defense contractor) invented a very sophisticated fighter jet. If they could only sell this advanced plane exclusively to the U.S. government, then the U.S. government would be classified as a monopsony buyer - This statement is True because U.S government is the single buyer.

Rahul Sunny answered 2 years ago
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