Assume a series of forest fires reduces the supply of lumber, which is an input in the production of wooden bats. Baseballs and wooden bats are complements. If the price of wooden bats increases, we can expect the
A. Demand for baseballs to decrease.
B. Supply of baseballs to increase.
C. Supply of baseballs to decrease.
D. Demand for baseballs to increase.
Answer: A
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Last year Christine worked as a consultant. She hired an administrative assistant for $15,000 per year and rented office space (utilities included) for $3,000 per month. Her total revenue for the year was $100,000. If Christine hadn't worked as a consultant, she would have worked at a real estate firm earning $40,000 a year. Last year, Christine's explicit costs were ________, and her implicit costs were ________.
A. $15,000; $43,000 B. $36,000; $140,000 C. $51,000; $40,000 D. $18,000; $40,000
On the graph above, unplanned inventory investment occurs if the economy is moving from point ________ to point ________
A) D; C B) C; B C) B; A D) all of the above E) none of the above
Which of the following is TRUE of a perfectly competitive firm and a monopoly in the long run?
A) P = MC B) P = ATC C) MR = MC D) P = MR
Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity
a. True b. False Indicate whether the statement is true or false