Assume that a firm's marginal revenue curve intersects the rising portion of the marginal cost curve at 100 units of output. At this output level, a profit-maximizing firm's total cost is $1,000 . If the price of the product is $3 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to:
a. -$1,000.
b. -$700.
c. -$400.
d. -$600.
e. $200.
b
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Refer to the following graph. An increase in aggregate demand when the economy is already at full employment is reflected as a rightward shift of the aggregate demand curve from
a. AD1 to AD2.
b. AD2 to AD3.
c. AD3 to AD4.
d. AD4 to AD5.
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each. What are Wanda's explicit costs per glass?
a. $0.18 b. $0.10 c. $0.08 d. $0.02
Under the 2009 jobs stimulus bill signed by President Obama, who can apply for aid after losing their job due to import competition?
a. service sector workers b. Farmers c. neither service sector workers nor farmers d. both service sector workers and farmers
Turkey is an importer of wheat. The world price of a bushel of wheat is $7 . Turkey imposes a $3-per-bushel tariff on wheat. Turkey is a price-taker in the wheat market. As a result of the tariff,
a. Turkish consumers of wheat become worse off and Turkish producers of wheat become worse off. b. Turkish consumers of wheat become worse off and Turkish producers of wheat become better off. c. Turkish consumers of wheat become better off and Turkish producers of wheat become worse off. d. Turkish consumers of wheat become better off and Turkish producers of wheat become better off.