Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's economic profit?
A) zero
B) between 0 and $0.50 per hour
C) between $0.51 and $1.00 per hour
D) more than $1.00 per hour
A
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If Bella's Pizza, a local pizzeria, purchases canned tomatoes from a grocery store to make their pizza sauce, this is an example of ________.
A) forward integration B) backward integration C) outsourcing D) using a spot market
Economic profit is defined as the difference between revenue and ____
a. explicit cost b. total economic cost c. implicit cost d. shareholder wealth e. none of the above
If the price elasticity of demand for radios is 2.5 (dropping the minus sign), then a 50 percent reduction in the price of radios will lead to
a. the sale of 200 additional radios. b. the sale of 125 percent more radios than before. c. the sale of 150 percent more radios than before. d. the sale of 25 percent more radios than before.
An increase in the Consumer Price Index indicates that
a. the real income of households is increasing. b. the purchasing power of the dollar is increasing. c. the cost of buying the typical bundle of goods consumed by households is increasing. d. the real net worth of consumers is increasing.