Refer to the production possibility graph above. Assume that the economy is in equilibrium at point e. If the price of good A increases, the new equilibrium is most likely to be
A) point d.
B) point e.
C) point f.
D) point h.
E) point b.
A
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In the short run, perfectly competitive firms ________ but in the long run, perfectly competitive firms ________
A) can incur an economic loss; incur an economic loss B) can incur economic losses; make an economic profit C) must make an economic profit; make an economic profit D) can incur an economic loss; make zero economic profit
Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then according to the Heckscher-Ohlin Theorem, Chile should export goods that
A) intensively use labor input. B) intensively use capital input. C) intensively use natural resources. D) use capital and labor in about equal proportions.
Why is the price of a scarce exhaustible resource in a competitive market above the marginal cost of providing a unit of the resource?
What will be an ideal response?
Sweet Husks is a perfectly competitive corn farm. Currently, the expected price of an ear of corn is $0.40 and, at its current production level, Sweet Husks has a marginal cost of $.30 per ear. The expected profit from producing an additional ear of corn is ________.
A) $0.10 B) $0.70 C) $0.20 D) $0.40