Using the supply and demand model, what is the best way to show the effects on the plywood market of households preparing for a hurricane? (Note: people use plywood to board up their homes to protect them from damage from a hurricane.)
A. Supply curve moved right and demand curve shifted to the left.
B. Both supply and demand curves shifted to the right.
C. Supply curve shifted to the right, demand curve did not shift.
D. Demand curve shifted to the right, supply curve did not shift.
Answer: D
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Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. Based on this information, we can say that
A. profits will be increased by hiring additional workers. B. profits will be increased by hiring fewer workers. C. the restaurant is maximizing profits. D. marginal revenue product must exceed average revenue product.
As price is lowered from a point higher than the equilibrium price, it will bring about
a. an increase in demand. b. a decrease in supply. c. an increase in quantity demanded. d. an increase in supply.
Other things the same, which of the following would increase productivity?
a. an increase in either human or physical capital b. an increase in human capital but not an increase in physical capital c. an increase in physical capital but not an increase in human capital d. neither an increase in human capital nor an increase in physical capital
When a regulator allows a monopolist to set its price equal to long-run average cost, the regulator is practicing
A) marginal cost pricing. B) operating cost pricing. C) average cost pricing. D) optimal cost pricing.