Reese has recently left her teaching job to open a bakery. The ______ is an example of the implicit costs of her bakery business.
a. rent she pays for the commercial space
b. teaching salary she gave up to start her bakery
c. monthly payments she makes for bakery equipment
d. wages she pays her counter assistant
b. teaching salary she gave up to start her bakery
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A buyer is said to be a price taker if she:
A) can bargain over the prices of the goods she consumes. B) can purchase any amount of a good at a fixed price provided she has the money to pay for it. C) always pays less than the market-determined price for the goods she is consuming. D) ignores the prices of related goods and considers only the price of the goods she is purchasing.
If, for a perfectly competitive firm, price exceeds the marginal cost of production, the firm should
A) reduce its output. B) increase its output. C) lower the price. D) keep output constant and enjoy the above normal profit.
If you sell a futures contract for U.S. Treasury bills and on the delivery date the interest rate of T-bills is higher than you expected, you will have
A) lost money on your long position. B) gained money on your long position. C) lost money on your short position. D) gained money on your short position.
Along a linear demand curve, as the price increases from zero,
a. demand decreases b. demand increases c. quantity demanded increases d. total revenue first increases but eventually decreases e. total revenue first decreases but eventually increases