Kristi sells purses. Her cost is $35 per purse. On a certain day, she sells 12 purses, and her producer surplus for that day amounts to $180 . Kristi sold each purse for
a. $65.
b. $50.
c. $45.
d. $53.
b
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If the price of airline travel in Europe falls and the demand for train travel in Europe also falls, then the two goods are
A) complements. B) normal goods. C) substitutes. D) inferior goods.
Monopsonistic competition
a. exists when there are many buyers offering differentiated conditions for sellers. b. is very prevalent in the U.S. economy. c. exists when a great number of firms hire labor, offering a variety of working conditions and fringe benefits. d. All of the above.
Which of the following is correct?
a. Monetarists believe there is a direct link between changes in a nation's money supply and changes in expenditures. b. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures. c. Keynesians believe there is no short-term link between changes in a nation's money supply and changes in expenditures. d. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures. e. None of the above.
Suits Only, a dry cleaning firm that specializes in cleaning business suits, operates in a perfectly competitive market. Robin Smith, an exceptionally talented manager, has been hired to manage Suits Only. In the dry cleaning business, a manager typically makes a salary of $400 per week. Suits Only faces the long-run average and marginal costs shown in the figure below. In long-run competitive equilibrium, the market price for cleaning a business suit is $4.50.
Given the above, Robin Smith is probably going to negotiate a salary of ________ per week, ________ of which is economic rent.
A. $500, $500 B. $400, $0 C. $475, $75 D. $500, $100