For all firms, the additional revenue collected from the sale of one additional unit of output is termed:
A. marginal profit.
B. average revenue.
C. marginal revenue.
D. price.
Answer: C
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Economic rent is:
A. the difference between the payment made to the owner of a factor of production and the owner's reservation price. B. sometimes higher and sometimes lower than the owner's reservation price. C. the amount people pay for an apartment in a perfectly competitive market. D. the payment made to the owner of a factor of production, which is usually equal to the owner's reservation price.
Suppose that the current price of oil is $60 per barrel and the quantity sold is 90 million barrels per day
The current estimates of the price elasticity of supply and demand are ? = 1 and ? = -.2 respectively. What will be the effects on the market price and quantity if the U.S. government suddenly decides to purchase an additional 2 million barrels of oil? Assume that the supply and demand curves are linear and the addition consumption of oil by the government results in a parallel shift of the supply curve to the left by 2 million barrels per day.
If personal income taxes are increased, disposable income and consumption
a. increase. b. stay the same. c. decrease. d. change in an unpredictable direction.
Which of the following statements about exchange is true?
a. If everyone starts off with the same quantities of each good, it would be impossible to realize gains from trade. b. Exchange tends to move each good toward those individuals who value the good more highly. c. Exchange always results in one party being made better off and the other being made worse off. d. For trade to occur, everyone must start off with the same value of the good that is traded.