8. The automobile industry is a. in monopolistic competition because brand names

Question

8. The automobile industry is a. in monopolistic competition because brand names are important b. in monopolistic competition because it has economies of scale c. in monopolistic competition for legal reasons d. an oligopoly because each firm must produce a large amount of output before it can achieve low average costs an oligopoly for legal reasons e. CHAPTER 11-Resource Markets 1. Resource owners supply resources in ways that a. maximize their utility b. maximize their income minimize the amount of work c. d. maximize the amount of work e. maximize the demand for their resource 2. As the price of a resource (e.g., labor) decreases, a. demand for that resource increases b. the quantity demanded of that resource decreases c. the supply of that resource increases d. producers are more willing and able to hire that resource e. producers are less willing and able to hire that resource 3. A firm's demand for a resource is a(n) a. final demand b. derived demand c. secondary demand d. induced demand e. marginal demand 4. Economic rent is defined as a. the opportunity cost of a resource b. the payment to a resource in excess of its opportunity cost c. opportunity cost d. total earnings e. the part of a homeowner's housing that is included in GDP accounts

Explanation / Answer

8. D. Automobile industry is dominated by a few players and the industry is capital and labor intensive.

1. a. Resources owners supply their resources to maximize their utility.

2. d. As the price of labor falls, more labor will be hired.

3. b. Derived demand. The demand for resource is derived from the demand for product or service.

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