Cost
A) is what the buyer pays to get the good.
B) is always equal to the marginal benefit for every unit of a good produced.
C) is what the seller must give up to produce the good.
D) is greater than market price, which results in a profit for firms.
E) means the same thing as price.
C
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Use the following graph to answer the next question.
If demand for overnight funds in the graph should increase by $50 billion at each and every point on the demand curve, but the Federal Reserve wants to keep the target rate at 5.0%, what will be the new equilibrium quantity of reserves?
A. $200 billion B. $100 billion C. $150 billion D. $250 billion
Figure 3.2 shows the total cost and total benefit curves for a professional guitarist. According to the graph, which of the following is the best number of hours the guitarist should spend practicing each day?
A. 3
B. 4
C. 6
D. 7
Which of the following statements describes a basic difference in the economic effects of a tariff versus a quota?
A. A quota raises product prices, but a tariff does not. B. A quota reduces domestic consumption of the product, but a tariff does not. C. A tariff raises product prices, but a quota does not. D. A tariff allows imports to increase if demand increases, whereas a quota does not.
If a perfectly competitive firm faces a price below its average total cost but above the shutdown point, it should stay open
a. True b. False Indicate whether the statement is true or false