At its present rate of output, 200 units, a perfectly competitive firm has variable costs of $10,000 and marginal cost of $50, and accepts the market price of $40 per unit. To improve its profit/loss situation, this firm should
a. increase output
b. reduce output but not to zero
c. maintain the present rate of output
d. shut down
e. raise the price
D
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An unexpected rise in the Producer Price Index should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
In order to acquire more of a good we must sacrifice production of another good, because resources are in limited supply. This illustrates the concept of: a. the division of labor. b. ceteris paribus
c. opportunity cost. d. specialization.
A statement issued by the president's economic advisors stating that growth can continue without price increases indicates that they believe the relevant aggregate supply curve is
a. vertical. b. horizontal. c. downward sloping. d. upward sloping.
Jennifer wants to buy a pound of cheese. She is willing to pay up to $5 per pound for her favorite brand. A local store currently sells her favorite brand for $4 but is willing to receive $3.50 per pound. The surplus earned by the store is _____
a. $0.50 b. $1 c. $1.50 d. $4