Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has increased?
A) A
B) B
C) neither graph
D) both graphs
A
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In a competitive market with identical firms,
a. an increase in demand in the short run will result in a new price above the minimum of average total cost, allowing firms to earn a positive economic profit in both the short run and the long run. b. firms cannot earn positive economic profit in either the short run or long run. c. firms can earn positive economic profit in the long run if the long-run market supply curve is upward sloping. d. free entry and exit into the market requires that firms earn zero economic profit in the long run even though they may be able to earn positive economic profit in the short run.
The government receives all of the benefits associated with the production of a public good.
Answer the following statement true (T) or false (F)
If water became very scarce and diamonds became very plentiful
A. the marginal utility of diamonds and water would both rise. B. the marginal utility of both water and diamonds would both fall. C. the marginal utility of diamonds would rise and the marginal utility of water would fall. D. the marginal utility of water would rise and the marginal utility of diamonds would fall.
Peter Piper picks a peck of pickled peppers using 10 units of labor and two pepper-picking machines. The last worker hired picked 100 peppers, and the last machine added 1,000 peppers. If labor can be hired at $5 a pepper picker and machines cost $5,000, what advice do you have for Peter Piper?
What will be an ideal response?