Which of the following is considered a durable good?
A) medical care
B) clothing
C) food
D) a washing machine
Answer: D
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Consider the two graphs above. Suppose producers forecast a decrease in sales. This would ________ the desired level of inventories, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
A negative externality is a situation in which
A) there is a spillover of benefits. B) a cost associated with an economic activity is borne by a third party. C) a firm is paying in excess of the total costs of producing a good. D) none of the above.
Refer to the figure at right. when the budget line rotates from "b" to "c",
A. the price of product J increases
B. the price of product J decreases
C. the price of product K decreases
D. the price of product K increases
Answer the following statement(s) true (T) or false (F)
1. If a supplier’s price is higher than the market price in a perfectly competitive market, then the supplier will have difficulty selling her products. 2. To maximize profits, the firm wants to produce the amount that maximizes the difference between its total revenues and total costs. 3. Marginal revenue in a perfectly competitive firm is equal to the price of the good. 4. Step 2 of the three-step method involves finding total cost. 5. If total revenue is equal to total cost at q*, then the firm is generating economic profits.