If Armenia can produce two rugs or 100 spy novels in an hour, and Turkey can produce one rug or 50 spy novels in an hour,
a. the terms of trade are 50 spy novels per rug, and Turkey should produce both rugs and spy novels
b. the terms of trade are 50 spy novels per rug, and Turkey should produce only rugs
c. the terms of trade are 50 spy novels per rug, and Armenia should produce only rugs
d. there are no gains from trade
e. the terms of trade are will exceed 50 spy novels per rug, and Armenia should produce both rugs and spy novels
D
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Bob's Books is the only bookstore in town. The figure above shows the demand curve for books and Bob's Books' marginal revenue curve and marginal cost curve
Bob's Books maximizes its profit and sets the price of a book equal to ________ and has total annual revenue of ________. A) $40; $40,000 B) $30; $60,000 C) $20, $60,000 D) $10; $40,000
In the mid-1980s, the salaries of accounting professors with Ph.D.s increased dramatically. This resulted in an increase in enrollments in Ph.D. accounting programs
Since a Ph.D. degree in accounting may take at least four years to complete, the short-run elasticity of supply of accounting professors is A) greater than the long-run-elasticity of supply. B) less than the long-run elasticity of supply. C) equal to the long-run elasticity of supply. D) equal to the short-run elasticity of demand.
When the absolute price elasticity of demand equals 2.5, demand is
A) elastic. B) unit-elastic. C) inelastic. D) undetermined without more information.
Suppose a profit-maximizing monopolist faces a constant marginal cost of $10, produces an output level of 100 units, and charges a price of $50 . The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $4,000
a. True b. False Indicate whether the statement is true or false