A firewood supplier has a very seasonal demand for its product. Its transport trucks lay idle during the warmer parts of the year. It can exploit economies of scope if
a. It merges with a manufacturer of wooden Christmas ornaments
b. It turns into a rental trucking company during the warmer months for other seasonal producers such as ice-cream makers
c. It starts producing other seasonal products that would sell mostly during the warmer months such as rustic lawn chairs
d. B and C
d
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In the above figure, at the efficient quantity of CDs
A) total consumer surplus is zero. B) total producer surplus is zero. C) the sum of consumer surplus and producer surplus is maximized. D) Both answers A and B are correct.
Suppose some firms in a perfectly competitive market are incurring an economic loss. As a result,
A) all the firms will eventually incur an economic loss. B) some firms will leave the market and the price of the good will rise. C) some firms will leave the market and the remaining firms' quantity will decrease. D) the total market economic profit must equal $0.
Compared to a barter economy, using money increases efficiency by reducing:
A. transaction costs. B. the need to exchange goods. C. the need to specialize. D. inflation.
Related to the Economics in Practice on p. 437: If the effects of pollution on society as a measure of welfare were included in GDP calculations, the measured level of GDP would most likely
A. decrease. B. become negative. C. increase. D. not change.