With marginal cost pricing
A. there cannot be any short-run economic profit.
B. all opportunity costs will be covered in the short run.
C. the price charged is equal to the opportunity cost to society of producing one more unit of the good.
D. marginal benefits are usually less than marginal cost.
Answer: C
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If the price of butter increases, the demand for margarine
A) will be unchanged. B) will shift outward. C) will shift inward. D) will kink into an S-curve.
If the residents of a country specialize in a good in which they have a comparative advantage and trade with residents in another nation, the residents in the first country
A) can consume more than they could without trade. B) can produce more than they could without trade. C) will have a lower standard of living. D) will be exploited by the second nation.
Buying a product in one market and selling it in another is called
A) competition. B) arbitrage. C) efficiency. D) comparative advantage.
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each. What are Wanda's total economic profits?
a. $150 b. $126 c. $96 d. $54