Domestic rice farmers are demanding that the government set an import tariff. From an economic perspective, which of the following statements could explain why?

The rice farmers want to reduce demand in the domestic market to ease the burden they experience in production.

The rice farmers want to increase demand in the domestic market to increase their revenues.

The rice farmers expect that helping generate government revenue will lead to more favorable trade deals in the long run.

The rice farmers expect the intervention to reduce foreign rice in the market, which will increase their production, price, and surplus.

The rice farmers assume that the intervention will increase the foreign rice brought into the market and reduce both price and consumer surplus.

John starts a bicycle business and makes and sells bicycles similar to those of his competitors. The bicycle industry has no barriers to entry and exit and there are many firms in the industry. John controls the price of his bicycles. Which of the following would have to occur for John's business to become a perfectly competitive firm?

The business would have to sell highly differentiated products.

There would have to be barriers to entry in the bicycle business.

John would have to sell the quantity that would maximize his profits.

The number of firms in the bicycle market would have to become restricted.

John would have to become a price taker, accepting the market price for bicycles.

Which of the following terms describes a market in which the market size for cups of coffee is 20,000 cups per day in a city and the production at minimum efficient scale equals 500 cups per day?

Concentrated

Fragmented

Monopolized

Oligopolistic

Regulated

Which of the following is an expression of the production function?

As inputs increase, total output increases until the minimum efficient scale is reached, then declines.

As inputs increase, total output increases but at a slowing rate when diminishing returns sets in.

As inputs increase, total output decreases because of the inverse relationship between input and output.

As marginal costs increase, total output will increase in order to gain higher total revenue and profits.

As marginal costs increase, total output decreases until maximum efficient scale is restored.