Land used to grow corn could also be used to grow soybeans. Which of the following is true when the farmer plants soybeans and the market price of corn rises?
a. The opportunity cost of producing soybeans decreases.
b. The opportunity cost of producing soybeans increases.
c. There will be no change in the opportunity cost of producing soybeans.
d. The opportunity cost of producing corn increases.
B
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A sales tax will be divided so that
A) the buyers pay the full amount if supply is perfectly inelastic. B) the sellers pay the full amount if supply is perfectly inelastic. C) the sellers pay the full amount if supply is perfectly elastic. D) both buyers and sellers pay some of the tax if supply is perfectly elastic.
If your professor decided to give all of his students the highest grade in the class, would that affect your classmates' incentives to study?
What will be an ideal response?
What is a market failure?
A) It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal private cost. B) It refers to a breakdown in a market economy because of widespread corruption in government. C) It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost. D) It refers to a situation where an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event.
A monopolist's demand function is P = 1624 - 4Q, and its total cost function is
TC = 22,000 + 24Q -4Q2 + 1/3 Q3, where Q is output produced and sold. a. At what level of output and sales (Q) and price (P) will total profits be maximized? b. At what level of output and sales (Q) and price (P) will total revenue be maximized? c. At what price (P) should the monopolist shut down?