Refer to the figure above. How many units of Good X will be demanded if the government sets a price ceiling of Pc on the good?
A) 0 units
B) 10 units
C) 25 units
D) 35 units
D
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Refer to Figure 13-17. In the long run, why will the firm produce Qf units and not Qg units, which has a lower its average cost of production?
A) At Qg, marginal revenue is less than average revenue which will result in a loss for the firm. B) Although its average cost of production is lower when the firm produces Qg units, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss. C) At Qg, average cost exceeds marginal cost so the firm will actually make a loss. D) The firm's goal is to charge a high price and make a small profit rather than a low price and no profit.
The price system
A) is the voluntary exchange system. B) is old fashioned and is no longer used. C) is used only in countries that are developing. D) is used by the government to maintain stable supply of goods.
The price elasticity of demand for labor will be smaller, the
A) smaller is the price elasticity of demand for the final product. B) easier it is to employ substitute inputs in production. C) larger is the proportion of wage costs in the total cost of production. D) longer is the time period under examination.
Suppose the demand for books goes down when the price of video games goes down. We can say that these two goods are
A. substitutes. B. complements. C. unrelated goods. D. perfect substitutes.