In the Following Figure, the First Panel Shows a Market

question 8

Multiple Choice

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S₁: Supply curve of automobiles prior to regulation
S₂: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-The marginal revenue product curve of a factor is negatively sloped because:

• A)the additional revenue generated from an additional unit of a factor remains constant as more resources are hired.
• B)the additional revenue generated from an additional unit of a factor declines as more resources are hired.
• C)the additional revenue generated from an additional unit of a factor usually becomes zero as more resources are hired.
• D)the additional revenue generated from an additional unit of a factor increases as more resources are hired.
• E)the additional revenue generated from an additional unit of a factor doubles every time new resources are hired.

Understand the law of demand and how price affects quantity demanded.

Comprehend the characteristics and implications of competitive markets.

Distinguish between movements along the demand curve and shifts of the demand curve.

Identify the factors that cause shifts in the demand curve.

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Definitions:

Random Variable

A Random Variable refers to a variable that can take on various numerical values, each determined by the outcome of a stochastic event.

Standard Normal

A normal distribution with a mean of zero and a standard deviation of one, used as the basis for z-scores.

Obtaining

The act of acquiring or getting possession of something.

Standard Normal

A normal distribution with a mean of 0 and a standard deviation of 1, used as a basis in statistical analysis for converting scores from any normal distribution.