Which of the following is true of the relationship between price and quantity supplied?
a. There is always an inverse relationship.
b. More is supplied at lower prices.
c. Producers work harder and sell more when the price decreases.
d. There is a direct relationship between price and quantity supplied.
e. It is always true that a higher price leads to a decrease in quantity supplied.
D
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Which of the following is an example of an activity that creates an external cost?
i. a smoker emitting second-hand smoke ii. sulfur emitting from a smoke stack iii. throwing garbage on the roadside A) i only B) i and ii C) iii only D) ii and iii E) i, ii, and iii
In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price
A) corresponding to the demand curve where marginal revenue equals zero. B) equal to average variable cost where it intersects the demand curve. C) equal to average total cost where it intersects the demand curve. D) equal to marginal cost where it intersects the demand curve.
The CPI equals 1.00 in year one and 1.15 in year two. If the nominal wage is $15 in year one and a contract calls for the wage to be indexed to the CPI, what will be the nominal wage in year two?
A. $17.25 B. $15.00 C. $22.50 D. $16.15
Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:
A. not an economic problem because neither activity costs money. B. an economic problem because Chris has only one hour, and engaging in one activity means giving up the other. C. not an economic problem because it's an hour that Chris has no matter what he does. D. an economic problem because the tuition Chris pays covers the cost of both the gym and the library.