If the (steadily increasing) marginal cost of another day spent in the hospital exceeds the (steadily decreasing) marginal benefit of an additional day spent in the hospital, the rational consumer of health care services would be predicted to
A. regret having ever entered that hospital.
B. choose not to stay in the hospital for that additional day.
C. stay in the hospital for at least that additional day.
D. demand a private hospital room.
Answer: B
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Different measurements of elasticity include:
A. income elasticity of demand, income elasticity of supply. B. price elasticity of demand, price elasticity of supply. C. cross-price elasticity of demand, income elasticity of supply. D. preference elasticity of demand, cross-price elasticity of supply.
Suppose you were working for Richstone's bakery and calculating whether the bakery was making a profit, considering the recent increase in rent. You have data for price (P), MR, ATC, MC, AVC, at the quantity of 1,000 breads a day. Among the other relationships you consider is (P – ATC) which measures the firm's
a. total profit b. profit per unit of output c. marginal profit d. total revenue e. average variable cost
On the foreign exchange market, an increase in a country's exchange rate
A) decreases the demand for its currency and shifts the demand curve rightward. B) increases the quantity demanded of its currency and leads to a movement up along the demand curve. C) decreases the quantity demanded of its currency and leads to a movement up along the demand curve. D) decreases the demand for its currency and shifts the demand curve leftward. E) increases the quantity demanded of its currency and leads to a movement down along the demand curve.
Refer to Figure 15-15. Why won't regulators require that Erickson Power produce the economically efficient output level?
A) because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit B) because Erickson Power will earn zero profit C) because there is insufficient demand at that output level D) because Erickson Power will sustain persistent losses and will not continue in business in the long run