Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marginal revenue to ________ and their profit-maximizing level of output to ________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Answer: A
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Refer to the scenario above. The situation here is similar to that in a(n) ________
A) prisoners' dilemma B) zero-sum game C) ultimatum game D) symmetric game
Given the scenario described, if the market price of hammers increased from $8 to $11:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. A. total producer surplus would increase to $5. B. total producer surplus would decrease to $1. C. total producer surplus would increase to $17. D. total producer surplus would decrease to $7.
Lorna loves sweaters! She has drawers filled with them, and continues to buy them. But she's sort of strange in this one respect: she buys more when price rises. It is strange because her behavior violates the law of
a. the ratio of marginal utility to price b. the ratio of price to marginal utility c. demand d. diminishing marginal utility e. increasing marginal utility