Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A. 30 LCD televisions that must be forgone to produce 60 additional OLED televisions.
B. 90 LCD televisions that must be forgone to produce 20 additional OLED televisions.
C. 30 LCD televisions that must be forgone to produce 20 additional OLED televisions.
D. 120 LCD televisions that must be forgone to produce 40 additional OLED televisions.
Answer: C
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When economic profits are zero for a firm, it means that:
A. no firms will enter or exit the industry. B. average revenue slightly above average total cost. C. average variable costs are minimized. D. accounting profits are also zero.
Assuming the economy represented in the graph shown is currently at point B, if the government does nothing, then eventually:
A. SRAS will shift to the right, and the economy will have Y3 output with lower prices.
B. SRAS will shift left, and the economy will experience stagflation.
C. LRAS will shift left, until lower equilibrium output is reached with lower prices.
D. the entire economy will collapse.
A monopolist that does not practice price discrimination should never produce in the
A. Inelastic portion of its demand curve because it can increase total revenue and reduce total costs by increasing the price. B. Segment of its demand curve where the price elasticity of demand is greater than 1. C. Inelastic portion of its demand curve because it can increase total revenue by more than it increases total cost by reducing the price. D. Elastic portion of its demand curve because it can increase total revenue and reduce total costs by lowering the price.
The greatest advantage of a corporation is
A) ease of setting up the business. B) the double taxation of dividends. C) separation of ownership and control of the business. D) limited liability.