Following adjustments to a new equilibrium in a market, the equilibrium quantity remains unchanged, but the market clearing price is now lower. Which of the following could definitely have caused this outcome?
A. Demand decreased, and supply increased.
B. Demand and supply both increased.
C. Demand increased, and supply decreased.
D. Demand and supply both decreased.
Answer: A
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A person's consumption possibilities is defined by the budget line because
A) it marks the boundary between what is affordable and unaffordable. B) it represents the individual's preference for different combinations of goods. C) it marks the boundary between what can be produced and what is unattainable given the current state of technology and resources. D) all consumers must consume on their budget line.
A farmer discovers that the total cost of growing 50 acres of eggplant is $50,000 and that the total cost of growing 51 acres of eggplant is $52,000. The marginal cost of the 51st acre of eggplant is
A) $52,000. B) $50,000. C) $2,000. D) $1,000.
An increase in a firm's fixed cost will not change the firm's profit-maximizing output in the short run
Indicate whether the statement is true or false
Diane Rae is a farmer in the perfectly competitive industry of sugar cane. She knows that she can sell more output than she currently does
a. only by lowering the price of her sugar cane b. only if she is able to drive out some of her competition c. without affecting the market price d. by raising the barriers to entry so that more of the market is left to those like herself who are already in the industry e. only if she can develop a patent on sales