The cost of production on the “bottom forty” is $100,000 for a given size crop. On the “north forty,” due to erosion of the soil, the cost is $150,000. If both are being farmed by tenants, we would expect the rent on the “bottom forty” to be
A. $50,000 below the rent on the north forty.
B. $50,000 above the rent on the north forty.
C. different from that on the north forty by an indeterminable amount.
D. $50,000, and the rent on the north forty is $50,000.
Answer: B
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Marginal revenue equals the change in total revenue that is earned by selling one more unit of output.
Answer the following statement true (T) or false (F)
The legality of which of the following actions would be determined using the rule -of-reason?
A) an agreement with a competitor firm to adjust output levels B) an agreement with a competitor firm to not sell to a particular customer C) an agreement with a competitor firm not to bid on a contract D) an exclusive dealings contract with a customer
Industries with high barriers to entry
a. Pushes profits to normal returns b. Increases the likelihood of firms entering the industry c. Help firms sustain long term profits d. Increases the number of competitors
Suppose that a foreign monopolist supplies the entire domestic market (there is no domestic production). The home country then applies a 5% tariff on imports from the foreign monopolist. How will the tariff affect the price in the home market?
a. It will increase by more than 5%. b. It will increase by 5%. c. It will increase by less than 5%. d. It will not change.