Suppose a perfectly competitive cotton farmer can produce 10 containers of cotton at an output at which marginal cost equals marginal revenue. The price per container of cotton is $100 and the average total cost is $75
What is the profit or loss that this cotton farmer is earning? A) $750
B) $150
C) $250
D) -$25
C
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People will continue to use a common property until the marginal cost of using it equals
a. zero. b. the social marginal benefit from using it. c. the admission fee that a competitive firm would charge for its use. d. the value they receive, on average, from using it.
If all firms in a competitive industry experience an increase in marginal costs, then which of the following is most likely to occur in the short run?
a. Firms will enter the market. b. Existing firms will expand production. c. Firms will shutdown. d. Firms will exit the market.
Refer to Figure 26-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary policy. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to C. B) C to B. C) B to D. D) C to D. E) A to B.
The greater the risk of nonrepayment of a loan, other things being equal
A) the longer is the repayment term. B) the lower is the charged loan fees. C) the higher is the rate of interest. D) the smaller is the amount of collateral that is used.