A radio manufacturer has two plants -- one in Taiwan and one in California. At the current allocation of total output between the two plants, the last unit of output produced in the Taiwan plant added $8 to total cost, while the last unit of output produced in the California plant added $6 to total cost. If the firm switches one unit of output from the California to the Taiwan plant, then
A. profit will decrease $2.
B. profit will increase $6.
C. profit will decrease $6.
D. profit will increase $14.
Answer: A
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The above figure shows the market for game day t-shirts. If the price of t-shirts is $10, then
A) there is a surplus and the price of t-shirts will fall. B) there is a shortage and the price of t-shirts will fall. C) there is a shortage and the price of t-shirts will rise. D) there is a surplus and the price of t-shirts will rise. E) the market is in equilibrium.
Which of the following is not an example of a government-imposed entry barrier?
A) occupational licensing B) antitrust legislation C) patents D) barriers to international trade
Which of the following is an invalid argument for protection?
A) redistribution of income B) infant industry protection C) preservation of the home market D) All of the above
Wister and Narsum produce household appliances. Which of the following actions could be considered collusive?
a. Wister sets a price that maximizes its profits. b. Narsum becomes the price leader in the industry by increasing output. c. Wister has a strategy to react to any pricing changes made by Narsum. d. Narsum agrees to divide mutual profits with Wister.