The figure above shows the relationship between the price of a dozen roses and the quantity of roses a florist can sell. The slope between points B and C equals
A) 16.
B) 8.
C) 4.
D) 2.
E) 14.
C
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Suppose a factory can be designed to produce either trucks or cars. The figure above shows the marginal cost and marginal benefit of producing trucks in terms of the forgone cars
a. What is the marginal benefit of the 25th truck? b. What is the marginal cost of the 25th truck? c. Should the 25th truck be produced? Why or why not. d. What is the marginal benefit of the 75th truck? e. What is the marginal cost of the 75th truck? f. Should the 75th truck be produced? Why or why not? g. What is the allocatively efficient quantity of trucks?
In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits
a. diseconomies of scale because total cost is rising as output rises. b. diseconomies of scale because average total cost is rising as output rises. c. economies of scale because total cost is rising as output rises. d. economies of scale because average total cost is falling as output rises.
Give an example of a firm that cannot cover total costs but decides to remain open even so. Use hypothetical numbers and avoid using any examples provided in the text.
What will be an ideal response?
Income elasticity is defined as the:
A. percentage change in demand divided by the percentage change in income. B. change in income divided by the change in demand. C. percentage change in income divided by the percentage change in demand. D. change in demand divided by the change in income.