Price taking producers make zero economic profit when price falls
A. at the lowest point of the average cost curve
B. at the point where marginal cost crosses average cost
C. at the lowest point of the marginal cost curve
D. both (a) and (b)
E. both (a) and (c)
F. both (b) and (c)
G. All of the above
H. None of the above
Answer: D
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If Katherine claims that when it comes to buying shoes, "price is no object," her demand curve for shoes is likely to be
a. horizontal b. nonexistent c. upward sloping d. highly inelastic e. unit elastic
If the price of one Weight Watchers' frozen dinner is $2 and the price of one dozen jelly doughnuts is $3, which of the following would Kent, a utility maximizing consumer, buy with his $6?Jelly DonutsFrozen DinnersDozen Consumed per DayTotal utility (Units of utility)Dinners Consumed per DayTotal utility (Units of utility)0000112116221232327346430442530542628636
A. two frozen dinners and two dozen jelly doughnuts B. three frozen dinners C. two dozen jelly doughnuts D. one frozen dinner and four dozen jelly doughnuts
Suppose that each serving of Mac amp; Cheese costs $0.50 to make no matter how many servings are produced. This means that the price elasticity of supply for Mac amp; Cheese is ________ and the supply curve is ________.
A. infinite; perfectly inelastic B. one; perfectly inelastic C. infinite; perfectly elastic D. zero; perfectly elastic
The above figure shows the payoff to two gasoline stations, A and B, deciding to operate in an isolated town. Suppose a $60 fee is required to enter the market. If firm A chooses its strategy first, then
A) firm A will not enter. B) neither firm will enter. C) both firms will enter. D) firm A will enter and firm B will not.