Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and 80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses?
A) 2.5 silk leaves
B) 10 silk leaves
C) 25 silk leaves
D) 55 silk leaves
Answer: C
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In perfectly competitive markets, an implication of entry and exit in response to economic profit and loss is that:
A. firms will earn zero economic profit in the long run. B. market demand is completely elastic. C. firms must earn positive economic profit in the long run. D. all firms will exit the market in the long run.
Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct?
a. The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve. b. The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve. c. Given two prices with which to calculate the price elasticity of supply, that elasticity would be the same for both curves. d. A decrease in demand will increase total revenue if the steeper supply curve is relevant, while a decrease in demand will decrease total revenue if the flatter supply cure is relevant.
What happens to equilibrium quantity when simultaneously demand increases and supply decreases?
A. Equilibrium quantity will increase. B. Equilibrium quantity will decrease. C. Equilibrium quantity will remain the same. D. Equilibrium quantity may increase, decrease, or remain the same depending on the magnitude of the shifts in demand and supply.
In the checkerboard model, the board eventually returned to equilibrium, but the equilibrium result was extreme segregation. This extreme segregation resulted from
A) an outright hatred of neighbors. B) an extreme dislike of neighbors. C) a mild preference of neighbors not to be outnumbered. D) government affirmative action policies.