In order for a market to reach equilibrium, producers must have enough information to make informed decisions about purchasing the product.
Answer the following statement true (T) or false (F)
False
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Kevin is re-finishing an antique grandfather clock that he purchased at a flea market for $300. He expects to be able to sell the clock for $450
At the last minute, Kevin discovers that he needs to repair the gears at a cost of $175 to make the clock worth $450 to potential buyers. It turns out that he could also sell the clock now, without completing the additional repairs, for $250. What should Kevin do? A) He should sell the clock now for $250. B) He should keep the clock but not make the repairs since the original $300 is a sunk cost. C) He should complete the additional repairs and sell the clock for $450. D) He should keep the clock after making the repairs since it is not rational to spend a total of $475 on an item that can only be sold for $450. E) Kevin is indifferent between selling the clock as is or selling it after completing the repairs.
Suppose a country, whose production and consumption of cell phones is large relative to the world market, has just entered the global market. If the country is a net-importer of cell phones, we would expect:
A. an increase in both world price and quantity of cell phones. B. a decrease in world price, and increase in world quantity of cell phones. C. an increase in world price and decrease in world quantity of cell phones. D. a decrease in both world price and quantity of cell phones.
Labor productivity is measured by _____ per _____.
Fill in the blank(s) with the appropriate word(s).
Refer to the data. If the market price for the firm's product is $32, the competitive firm will produce:
A. 8 units at an economic profit of $16.
B. 6 units at an economic profit of $7.98.
C. 10 units at an economic profit of $4.
D. 7 units at an economic profit of $41.50.