ECO 561

1) If a firm in a purely competitive industry is confronted with an equilibrium price of 5, its marginal revenue:

A. will be greater than 5

B. will also be 5

C. will be less than 5

D. may be either greater or less than 5

2) A firm that is motivated by self interest should:

A. always use large amounts of cheap inputs and small amounts of expensive inputs in producing its output

B. hire each input so the productivity of each is equal at the margin

C. always use large amounts of the most productive inputs and small amounts of the least productive inputs in producing its output

D. employ the combination of resources that will produce the profit-maximizing output at the minimum cost

3) If price is above the equilibrium level, competition among sellers to...