Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?
A) The supply increases so that the supply curve shifts rightward.
B) The supply decreases so that the supply curve shifts leftward.
C) The quantity supplied increases, but there is no shift in the supply curve.
D) The quantity supplied decreases, but there is no shift in the supply curve.
E) The quantity supplied decreases, and the supply curve shifts leftward.
B
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A perfectly competitive firm that is producing a positive quantity of a good maximizes its economic profit if it produces so that
A) total revenue = total cost. B) marginal revenue = marginal cost. C) average revenue = average total cost. D) average total cost = average variable cost.
Use Figure 13.2 which depicts a monopolist firm to help with the following question. Define the area of total costs that this firm will incur if it is maximizing profit. Use the letters that appear on the graph to identify the area
What will be an ideal response?
Consumers buy less of a good as its price increases because
a. production costs have risen. b. substitute goods are now relatively cheaper. c. the income of consumers has effectively risen. d. the higher price will make the good more valuable to each consumer.
If there is a fall in the interest rate, _____.
(A) Businesses will be more likely to expand their facilities. (B) The unemployment rate will most likely rise. (C) Consumers will be less likely to buy more expensive items. (D) There will be a downturn in the economy.