Suppose the short-run production function is q = 10 ? L. If the wage rate is $10 per unit of labor, then AVC equals
A) q.
B) q/10.
C) 10/q.
D) 1.
D
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Use the following graph of the demand for pasta to answer the question below.
Refer to the three demand curves for pasta and assume that pasta is an inferior good. Which of the following would shift the demand for pasta from D1 to D3?
A. an increase in the price of pasta B. a decrease in consumer incomes C. an increase in consumer incomes D. a decrease in the price of pasta
Explain the difference between the international trade effect, which leads to a movement along a given AD curve, and an increase in foreign incomes, which leads to a shift to a new AD curve
In effect, tariffs on imports are:
A. special taxes on domestic producers. B. subsidies to domestic consumers. C. subsidies to foreign producers. D. subsidies for domestic producers.
Which of the following statements is true about profits in a monopolistically competitive market?
(A) Monopolistically competitive firms are as profitable as monopoly firms. (B) Profits are rare in monopolistically competitive markets. (C) Most firms will earn substantial profits from year to year. (D) Many firms will earn profits in the short term, but they must constantly innovate and compete to earn profits in the long term.