Tim Tupper contracts with two other students to help him provide a term paper-typing service. In the last two weeks of the semester, he sees a tremendous increase in demand. His profit-maximizing response would be represented by
a. a rightward shift of the supply curve because it is possible to earn economic profits
b. a rightward shift of the supply curve because the increase in demand is probably only temporary
c. a reduction in supply to take full advantage of the increase in demand
d. a movement up to the right along the supply curve because the increase in demand is probably only temporary
e. an upward movement in horizontal demand curve he faces because now he can charge a lower price
D
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Free riding is primarily a characteristic of pure private goods
Indicate whether the statement is true or false
Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a theater ticket. If the price of one ticket falls from $25 to $10
A) consumer surplus decreases from $24 to $12. B) consumer surplus increases from $0 to $31. C) only three tickets will be sold. D) everyone will buy a ticket.
By definition, when the economy is in equilibrium it must be true that
A) leakages equal injections. B) saving equals investment. C) government spending equals taxes. D) exports equal imports.
A production goal may be set too high by upper management because
a. they are unsure about the actual costs of production b. they under-estimate the difficulty of meeting a goal c. division managers over-state the difficulty of meeting the goal d. all of the above