In a free market, the market price and quantity in the above figure will adjust to equilibrium values of
A. $1 per gallon and 50 million gallons.
B. $2 per gallon and 60 million gallons.
C. $4 per gallon and 10 million gallons.
D. $2 per gallon and 30 million gallons.
Answer: D
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Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day.Number ofCakes Per DayTotal CostPer Day0$1001$1802$2203$3004$4005$5206$660If Sarah's fixed costs double, then in the short run, her profit-maximizing level of output:
A. will increase. B. will shrink to zero if she starts earning a loss. C. will decrease. D. will not change.
The field of political economy:
A. examines the economic consequences of free markets. B. examines the economic consequences of public sector decision making. C. examines the economic consequences of private sector decision making. D. examines the labor market.
The IS curve has a positive slope because a(n) __________ in the interest rate leads to a(n) __________ in desired investment and this leads to an increase in GDP
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Which of the following characteristics of perfect competition does not apply in monopolistic competition?
a. free entry and exit b. homogeneous products c. numerous participants d. perfect information