Exhibit 4-3 Supply and demand curves
In Exhibit 4-3, which of the following might cause a shift from S2 to S1?
A. A decrease in input prices.
B. A decrease in technology.
C. An increase in input prices.
D. An increase in consumer income.
Answer: A
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Some would cite the purchase of defective products and the rising cost of health care as market failures. Argue that these are not true market failures.
What will be an ideal response?
When an economic unit limits the scope of its productive efforts instead of trying to produce everything it needs, it is engaging in
a. exchange. b. comparative production. c. specialization. d. self-sufficiency.
Average fixed cost is equal to
A) the amount of total cost that does not change as output changes in the short run. B) fixed cost divided by the quantity of output produced. C) average total cost plus average variable cost. D) fixed cost multiplied by the quantity of output produced.
Which of the following defines a sunk cost?
a. Cost of the next best alternative b. Cost of producing an additional unit c. An asset with no scrap value d. Total cost of producing a product