The price of a firm's product is $6 and the firm faces a constant marginal cost of $4 that is equal to its (constant) average total cost. If the firm does not sell a unit of its product on the day it was produced, it is sold in a secondary market for a price of $3. If the firm does not sell a unit of its product on the day it was produced, there is a ________ of ________ per unit not sold.
A) loss; $2 B) loss; $1 C) profit; $1 D) profit; $2
B) loss; $1
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If the production possibilities frontier is a straight line, then the
A. opportunity cost of producing one good is zero. B. society is capable of producing only one of the goods and not the other. C. producer can produce more of both goods simultaneously. D. law of constant opportunity costs applies.
Refer to the figure above. If a price control is imposed at $8, what is the new producer surplus in the market?
A) $20 B) $40 C) $60 D) $80
Property owned by everyone is generally referred to as
A) social property. B) free property. C) common property. D) natural property.
A fundamental principle in demand analysis is that a change in price leads to
A. a complementary movement on the supply curve. B. a movement along the demand curve. C. a rightward shift of the demand curve. D. a leftward shift of the demand curve.