Assume a monopolist charges a price corresponding to the intersection of the marginal cost and marginal revenue curves. If this price is between its average variable cost and average total cost curves, the firm will:
a. earn an economic profit.
b. continue to operate in the short run.
c. shut down.
d. all of these are true.
b
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Which of the following is an implicit cost? i. wages paid to workers ii. the normal profit iii. the electric bill
A) i only B) ii only C) i and ii D) ii and iii E) Neither i, ii, nor iii
An example of an implicit cost of production is: a. the cost of leather used in manufacturing furniture
b. the opportunity cost of space in your home that is used for a home office. c. the wages paid to high school students that work in a fast-food restaurant. d. none of the above.
Private goods ____ rival ____ excludable
a. Are, and are b. Are, but are not c. Are not, but are d. Are not, and are not
If food is measured on the horizontal axis of a budget line diagram, and clothing is measured on the vertical axis, an increase in
a. the price of food will decrease the slope (e.g., -9 instead of -6) of the budget line b. the price of food will increase the slope of the budget line c. income will decrease the slope of the budget line d. income will increase the slope of the budget line e. the price of clothing will decrease the slope of the budget line