A Well-Written True-False Item

question 125

Multiple Choice

A well-written true-false item

• A) includes multiple ideas.
• B) has a correct response that is either true or false, and not subject to debate.
• C) typically contains irrelevant information as a distracter.
• D) Both includes multiple ideas and has a correct response that is either true or false, and not subject to debate.

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Definitions:

Short-Run Equilibrium

A situation in a market where demand equals supply, resulting in a stable price level, but which may not reflect long-term market dynamics.

Competitive Price-Taker

A rephrased scenario where businesses in competitive markets accept the prevailing market price as given because they have no power to influence it.

Profit

The financial gain realized when the revenue earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.