Jerry's Jellybean Factory produces 2,000 pounds of jellybeans per month and sells them in a perfectly competitive market. The marginal cost is $3 per pound, the average variable cost is $2 per pound, and the beans sell for $4 per pound. Jerry
A) is maximizing profit.
B) is incurring an economic loss and should shut down.
C) could increase his profit by producing more beans.
D) could increase his profit by producing fewer beans.
E) could increase his profit by raising the price of his beans.
C
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The two main reasons why international trade is restricted is because restricting trade means that governments can ________ and because domestic businesses ________
A) create jobs; earn profits B) obtain revenue; rent seek C) rent seek; want to dump D) prevent dumping; want to dump E) rent seek; obtain revenue
Rent control is an example of a price ceiling
Indicate whether the statement is true or false
Consumer surplus
A) is the difference between what a consumer pays for a good and the producer's cost. B) is the extra money a consumer pays above the minimum necessary price for the producer to produce it. C) is the difference between what a consumer would willingly pay for a good and the price actually paid. D) equals zero in the long run.
Which of the following are inherent in classical theory?
a. Flexible prices. b. Flexible wages. c. Long-run full employment. d. All of these.