The figure above shows a perfectly competitive firm. If the market price is $40 per unit, then the firm produces ________ units and makes an economic profit that is ________
A) more than 45; more than $400
B) 40; more than $400
C) 40; less than $400
D) 30; equal to zero
E) 30; more than $250
B
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Suppose a consumer has the following rule of thumb: Regardless of how gasoline prices fluctuate, she will always buy $20 of gasoline per week and then adjust her driving patterns accordingly. We can then conclude the following:
A. Her own-price elasticity of demand is equal to -1. B. Her income-elasticity of demand is 0. C. Her own-price elasticity is 0. D. Her income elasticity of demand is -1. E. Both (a) and (b). F. Both (a) and (d). G. Both (c) and (d) H. None of the above.
Which of the following costs always declines as output increases?
A) Average cost B) Marginal cost C) Fixed cost D) Average fixed cost E) Average variable cost
The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100,000 packs per day. Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000?
a. an increase in the price of other kinds of candy b. an increase in the price of the ingredients used to make chewing gum c. an agreement by workers in the chewing gum industry to work for lower wages d. a decrease in the number of young people in the population e. a decrease in income
The natural rate of unemployment:
A. is typically zero. B. is the normal level of unemployment in an economy in the long run. C. is constant over time. D. None of these is true.