1. Analyzing the behavior of the firm enhances our understanding of
a.
what decisions lie behind the market supply curve.
b.
how consumers allocate their income to purchase scarce resources.
c.
how financial institutions set interest rates.
d.
whether resources are allocated fairly.
2. A student might describe information about the costs of production as
a.
b.
c.
d.
3. Which field of economics studies how the number of firms affects the prices in a market and the efficiency of market
outcomes?
a.
macroeconomics
b.
industrial organization
c.
labor economics
d.
monetary economics
4. Economists in the field of industrial organization study how
a.
central banking policies affect financial markets.
b.
firms’ demand for labor and individuals’ supply of labor affect resource markets.
c.
firms’ decisions about prices and quantities depend on market conditions.
d.
externalities and public goods affect the environment.
5. Industrial organization is the study of
a.
how labor unions organize workers in industries.
b.
which managers are the most successful.
c.
how industries organize for political advantage.
d.
how firms’ decisions regarding prices and quantities depend on the market conditions they face.
6. To an economist, the field of industrial organization answers which of the following questions?
a.
Why are consumers subject to the law of demand?
b.
Why do firms experience diminishing marginal productivities of their inputs?
c.
How does the number of firms affect prices and the efficiency of market outcomes?
d.
How can government intervention improve industrial production when externalities are present?