Refer to Figure 7.2. If Happy Times Theater charges one price to day customers and another price to night customers, then its total profit on the sale of tickets will
A. stay the same.
B. vary according to the slope of marginal revenue curve.
C. increase.
D. decrease.
Answer: C
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We would expect that a fall in labor supply will have a proportionately larger effect on the market wage rate when
A) capital goods exist that can replace many of the workers. B) the product produced in the industry has several close substitutes. C) the product produced in the industry makes up a large portion of most families' budgets. D) labor represents a relatively small portion of total costs.
If the quantity supplied of a product is less than the quantity demanded, then:
a. There is a surplus of the product b. There is a shortage of the product c. The product is an inferior good d. The product is a normal good
Under which of the following conditions would a profit-maximizing monopolist necessarily raise price?
A. If product demand was price-inelastic B. If marginal revenue was greater than marginal cost. C. If product demand was price-elastic. D. If marginal cost was greater than marginal revenue.
Due to a firm generating external costs, the government decides to ________ the firm. When this happens, the firm will produce ________ units of output than before the tax was imposed in order to continue maximizing profits.
A. tax; fewer B. subsidize; fewer C. subsidize; more D. tax; more