In the short run, each perfectly competitive firm is free to
a. increase its plant size.
b. increase its volume of output up to its maximum existing capacity.
c. charge a price above the market price.
d. do all of these.
b. increase its volume of output up to its maximum existing capacity.
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If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss. II. decreases total surplus
A) Only I is correct. B) Only II is correct. C) Both I and II are correct. D) Neither I nor II is correct.
Refer to the above figure. Which one of the following statements is TRUE with regard to the economy depicted in the graph?
A) Point C cannot be produced. B) The best production point is 500 loaves of bread and 50 bales of wool. C) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is more than the amount of resources needed to produce 50 bales of wool and 250 loaves of bread. D) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is the same as the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.
In economics, satiation means
A. that quantity demanded and quantity supplied rises. B. that the market price has been attained. C. eventually the marginal value of the good consumed decreases. D. eventually the marginal value of the good consumed increases.
When a price ceiling that has an impact is imposed, it has the effect of
A. decreasing quantity supplied and increasing quantity demanded. B. decreasing both quantity supplied and quantity demanded. C. increasing quantity supplied and decreasing quantity demanded. D. increasing both quantity supplied and quantity demanded.