In Figure 8.10, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit-maximizing price of $300 per ticket. What is Fly Smart's profit per ticket?
A. $200
B. $120
C. $80
D. $0
Answer: A
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If the minimum efficient scale in toaster production is 500,000 units per year,
a. the average cost of producing 300,000 toasters is greater than the average cost of producing 500,000 b. the average cost of producing 300,000 toasters is equal to the average cost of producing 500,000 c. the total cost of producing 300,000 toasters is greater than the total cost of producing 500,000 d. the firm should not produce more than 500,000 toasters e. MC exceeds AC at 500,000 toasters
Pork from pigs can be used to produce bacon or sausage, but not both. If the price of bacon rises for some reason, then, everything else equal: a. the price of sausage will rise
b. the price of sausage will fall. c. the resources used to raise pigs will become less expensive. d. the demand for bacon will decrease.
Imagine an economy whose autonomous consumption is $100 billion and MPC is constant at 0.90 . Which of the following will shift the economy's consumption curve upward?
a. a tax increase b. higher capacity utilization rates c. higher national income d. lower wealth holdings e. expectations of higher inflation in the future
Candidates in a two-person race express very similar positions a few weeks before the election. A voter complains that there is not much difference between the two candidates. What this voter misunderstands or ignores is that
A) each candidate has an incentive to be like the other. B) each candidate has an incentive to be different from the other. C) each candidate has an incentive to be perceived as in the "middle of the road," and if both candidates correctly act on this incentive they will end up sounding alike. D) this simply happens sometimes. E) none of the above