A firm in a competitive market currently produces and sells 500 doorknobs for a price of $10 per doorknob. Which of the following events would decrease the firm's average revenue?
a. The firm increases its output above 500 doorknobs.
b. The firm decreases its output below 500 doorknobs.
c. The market price of doorknobs rises above $10.
d. The market price of doorknobs falls below $10.
d
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Fiona shares an office with her ex-husband. Her share of the rent and utilities is $625 per month. She is considering moving to a home office which she will not have to share with anyone
The home office will not cost her anything as far as extra rent or utilities. Recently, you ran into Fiona at the gym and she tells you that she has moved into her home office. Fiona is as rational as any other person. As an economics major, you rightly conclude that A) Fiona did not have a choice; her ex-husband was a jerk. B) Fiona figures that the benefit of having her own office (as opposed to sharing) is zero, since she is no longer paying rent and utilities. C) Fiona figures that the additional benefit of having her own office (as opposed to sharing) is at least $625. D) The cost of having one's own space outweighs the benefits.
If a $1 increase in price leads to a 3-unit decrease in quantity demanded, then demand must be elastic
a. True b. False
The present discounted value of $100 to be received in one year and with an interest rate of 10 percent is closest to
a. $100 b. $10 c. $110 d. $91 e. $80
Higher interest rates make it:
A. more expensive to borrow. B. harder to get a loan typically. C. easier to get a loan typically. D. less expensive to borrow.