Ceteris paribus, which of the following will cause the demand for peanut butter to decrease?
A. The factories that produce peanut butter close down for safety reasons.
B. The workers who pick peanuts, the main ingredient in peanut butter, demand a higher wage.
C. Many people learn that they are allergic to peanut butter.
D. It is reported that peanut butter prevents heart attacks.
Answer: C. Many people learn that they are allergic to peanut butter.
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Suppose the Christmas trees market is perfectly competitive. A business owner is currently suffering from a loss of $1,000, the cost of producing and selling an additional Christmas tree is $20, and the current market price is $25. The owner
A) should sell more trees. B) should shut down his business now. C) should advertise in the market. D) is already minimizing his loss.
Refer to the above figure. The firm's short-run shutdown price is
A) at $1. B) at $2. C) at $4. D) above $4.
A liquidity provider is someone who:
A. helps make a market more liquid by being always ready to buy or sell an asset. B. works at a bank and specializes in loans. C. works in the financial system. D. invest in the economy.
When a monopolist maximizes profit, its marginal cost will
a. be less than its average fixed cost. b. be less than the price per unit of its product. c. exceed its marginal revenue. d. equal its average total cost.