Which of the following best describes the concept of a firm with no market power?
Answer: One of a large number of firms producing an identical product as every firm in its industry and only providing a fraction of total market supply
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Suppose a frost destroys the tomato crop in California but farmers see an increase in their revenues. Which of the following best explains this?
A) Tomatoes are necessities. B) The demand for tomatoes is price inelastic. C) The decrease in supply led to huge price increases. D) The cross-price elasticity between tomatoes and most other substitute vegetables is very low.
A budget line is a straight line designed to show
a. how income is related to hours worked. b. all combinations of two goods that can be purchased with a given income. c. the way a homemaker should divide money among several commodities. d. that if more money is spent on one good, the breadwinner must work all the harder to maintain a satisfactory level of living. e. preferences for goods and services.
DeShawn has spent $600 purchasing and repairing an old fishing boat, which he expects to sell for $900 once the repairs are complete. DeShawn discovers that, in addition to the $600 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $900 to potential buyers. He can sell the boat as it is now for $400 . What should he do?
a. He should sell the boat as it is now for $400. b. He should keep the boat since it would not be rational to spend $1,000 on repairs and then sell the boat for $900. c. He should complete the repairs and sell the boat for $900. d. It does not matter which action he takes; the outcome is the same either way.
The shape of the total-cost curve is unrelated to the shape of the production function
a. True b. False Indicate whether the statement is true or false