Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup injected into each flake. The machine that injects the syrup into the flakes can do nothing else. Which of the following is true?
a. All of the machine's earnings are economic rent.
b. All of the machine's earnings are opportunity cost.
c. The supply curve for this machine is horizontal.
d. The demand curve for this machine is horizontal.
e. The demand curve for this machine is vertical.
A
You might also like to view...
Assume that goods X and Y are substitutes and are produced in perfectly competitive markets. All else constant, in the short run, a decrease in the supply of good X would cause:
A) an increase in the demand for good Y. B) a decrease in the demand for good Y. C) an increase in the supply of good Y. D) a decrease in supply of good Y.
During the recession phase of the business cycle, business firms become pessimistic about their future earning capacity as do banks. Nominal interest rates fall during recessions. Investment lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest payments. B) stay the same. C) fall. D) fall if the change in future earnings is thought to be greater than the change in interest payments.
A key aspect of the principal-agent problem is that
A) the principal cannot perfectly monitor the agent's actions. B) the principal can perfectly monitor the agent's actions. C) the output level does not depend on the agent's actions. D) the principal is always risk-averse.
Paul Bergen and Virginia Clancy each own a 100-acre soybean farm in Soyburg, Illinois. Together they grow 1/1000th of 1 percent of the nation's soybeans. When they merge, it will:
a. b and e. b. be a horizontal merger. c. reduce competition in the soy market. d. increase the market power of Paul and Virginia. e. probably go unnoticed outside of Soyburg.