The quantity demanded of Coca Cola has increased. The best explanation for this is that
A. the price of Pepsi has decreased.
B. the price of Coca Cola has decreased.
C. Coca Cola consumers had an increase in income.
D. Coca Cola has instituted a new, successful advertising campaign.
Answer: B
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Suppose a company increases production from a point where marginal cost equals average total cost to a point where marginal revenue and marginal cost are equal. Is it a good idea for the company to do this? Why?
A. No, average total costs have increased which means the company is not minimizing losses. B. Yes, because average variable costs are always less than average total costs. C. No, the previous level of output was the most efficient because it had the lowest average total cost. D. Yes, even though the previous level of output had minimized the average total cost, there was still profit to be earned by producing additional units.
The long-run ATC curve is simply a composite of the best short-run ATC possibilities.
Answer the following statement true (T) or false (F)
Suppose the following information describes the economy:Household saving300Business saving700Government purchases1,000Government transfers and interest payments500Government tax collections1,500GDP5,000Private saving equals ____and national saving equals ________.
A. 1,000; 1,000 B. 700; 0 C. 1,000; 2,000 D. 300; -200
Refer to the table above. If the six highest-value buyers and the six least-cost sellers engage in trade, what is the social surplus?
A) $6 B) $8 C) $10 D) $12