Answer the following questions true (T) or false (F)
1. If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then the marginal cost of producing the 5th necklace is $50.
2. Suppose the extra cost to a city of lowering the speed limits in all school zones by 10 mph is $10,000 per year. Then, the city should lower the school-zone speed limits by 10 mph if doing so results in an additional benefit of less than $10,000 per year.
3. All economic questions arise from the fact that resources are scarce.
1. TRUE
2. FALSE
3. TRUE
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Refer to the figure above. What is the quantity supplied in the market when the market is supplied by one firm?
A) 30 units B) 45 units C) 60 units D) 90 units
In reality, the long-run supply curve tends to be:
A. perfectly elastic. B. perfectly inelastic. C. upward sloping. D. downward sloping.
Land of Many Lakes (LML) sells butter to a broker in Albert Lea, Minnesota. Because the market for butter is generally considered to be competitive, LML
a. can choose the price at which it sells its butter but not the quantity of butter that it produces. b. can choose quantity of butter that it produces but not the price at which it sells its butter. c. can choose both the price at which it sells its butter and the quantity of butter that it produces. d. cannot choose either the price at which it sells it butter or the quantity of butter that it produces.
Suppose that the market for product X is characterized by a typical, downward-sloping, linear demand curve and a typical, upward-sloping, linear supply curve. Suppose the price elasticity of supply is 0.7 . Will the deadweight loss from a $3 tax per unit be smaller if the absolute value of the price elasticity of demand is 0.6 or if the absolute value of the price elasticity of demand is 1.5?