Which of the following may be consistent with profit-maximizing behavior by a price-taking producer:
A. Output is set where price is equal to marginal cost.
B. Output is set where marginal revenue is equal to marginal cost.
C. No output is produced.
D. (a) and (b)
E. (a) and (c)
F. (b) and (c)
G. All of the above
H. None of the above
Answer: G
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If the United States and other developed nations pay the cost of reducing public emissions, developing nations such as China could benefit from the reduction while not contributing to it. In this sense, one can think of reducing carbon emissions as being like a
A) quasi-private good.
B) private good.
C) quasi-public good.
D) public good.
Discuss the relationships among the various monetary aggregates
What will be an ideal response?
A positive externality results when
A) economists are sure that a good or service provides benefits to consumers. B) someone pays for a good or service even though she is not directly affected by the production or consumption of it. C) people who live in one country benefit from the production of a good or service that occurs in another country. D) people who are not directly involved in producing or paying for a good or service benefit from it.
Refer to Scenario 9.8 below to answer the question(s) that follow. SCENARIO 9.8: Investors put up $1,040,000 to construct a building and purchase all equipment for a new gourmet cupcake bakery. The investors expect to earn a minimum return of 10 per cent on their investment. The bakery is open 52 weeks per year and sells 900 cupcakes per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The bakery charges $8 on average per cupcake.Refer to Scenario 9.8. The bakery is making ________ economic profits per week.
A. break-even B. zero C. positive D. negative