In May 2008, Switzerland co-hosted the international soccer tournament Euro 2008. At that time, the Swiss potato industry association had been warning there could be a fry shortage because there was a potato shortage
The shortage meant that in the French fry market A) the price for French fries would be higher.
B) the price for French fries would be lower.
C) if the efficient quantity of fries is produced, total surplus would be minimized.
D) if the inefficient quantity of fries is produced, total surplus would be maximized.
A
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Preferences can be described as
A) what a person likes and dislikes. B) the income opportunities of several activities. C) feasible consumption combinations. D) the relative prices of goods and services.
A single-price monopolist is inefficient because
A) MR = MC. B) P > ATC. C) it creates a deadweight loss. D) it increases producer surplus.
If equilibrium is achieved in a competitive market, then
A) there is no deadweight loss. B) the deadweight loss will be maximized. C) the deadweight loss will equal the sum of consumer surplus and producer surplus. D) the deadweight loss will be the same as the opportunity cost of the last unit of output sold.
Answer the following questions true (T) or false (F)
1. If average product is decreasing, then marginal product must be negative. 2. If a firm experiences diminishing returns its marginal product must be negative. 3. The additional output a firm produces by hiring one more worker is called the marginal product of labor.