The price of a firm's product is $8 and the firm faces a constant marginal cost of $5 that is equal to its (constant) average total cost. If the firm does not sell a unit of its product on the day it was produced, it is sold in a secondary market for a price of $2. If the firm does not sell a unit of its product on the day it was produced, there is a ________ of ________ per unit not sold.
A) loss; $3 B) profit; $3 C) profit; $5 D) loss; $2
A) loss; $3
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Which one of the following statements about tariffs and quotas is correct?
A. Only the tariff produces revenues for the government. B. Only the quota will cause domestic production to increase. C. Only the quota will cause domestic prices paid by consumers to increase. D. Only the quota will cause the quantity of imports to decrease.
Unemployment rates tend to be highest during periods of:
A. recession. B. static movement. C. economic boom. D. recovery.
You and two friends are going to the movies and are going to one of three movies: A, B, or C. You prefer movie A to movie B and movie B to movie C. One of your friends prefers movie B to movie C and movie C to movie A. You other friend prefers movie C to movie A and movie A to movie B. The three of you decide to use majority rule voting to decide which movie you will see. If you first have a vote between movies A and B and then between the winner of that vote and movie C, then movie ________ will win. However, if you first vote between movies A and C and then between the winner of that vote and movie B, then movie ________ will win. This is an example of the ________.
A. A; B; majority rule voting B. C; B; voting paradox C. A; C; voting paradox D. B; C; impossibility theorem
A nonneutral tax cannot be used to reduce distortions created by another nonneutral tax.
Answer the following statement true (T) or false (F)