Land used to grow alfalfa could also be used to grow hay. Which of the following is true when the farmer plants hay and the market price of alfalfa rises?
a. The opportunity cost of producing hay decreases.
b. The opportunity cost of producing hay increases.
c. There will be no change in the opportunity cost of producing hay.
d. The opportunity cost of producing alfalfa increases.
B
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Suppose a farmer is a price taker in soybeans with cost functions given by TC = .1q2 + 2q + 30 MC = .2q + 2 Suppose the farmer has to purchase a license for $50 per period in order to stay in business. In this case, its new total cost function is
a. still TC = .1q2 + 2 b. TC = .1q2 + .2q + 80 c. TC = .1q2 + 2q + 50 d. TC = 50
Other things the same, if the price level falls, people
a. increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange increases. b. increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases. c. decrease foreign bond purchases, so the supply of dollars in market for foreign-currency exchange increases. d. decrease foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases.
Use the table below to answer the following question.UnitsMaximum Willingness to PayMarket Price1$14$102121031010481056106410What is the value of consumer surplus?
A. $6 B. $54 C. $44 D. $12
"A firm should shut down immediately when it earns zero economic profits." Do you agree or disagree? Explain your answer
What will be an ideal response?