A chewing gum monopoly can sell 400,000 packages of gum for $0.10 each. If it wants to sell 500,000 packages, its price must be
a. greater than the $0.10 if it doesn't want to earn less profit
b. less than the marginal revenue of the 500,000th package
c. less than $0.10
d. equal to $0.10
e. none of the above makes sense
C
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The factor accounting for the steepest rise in the currency ratio since 1892 is
A) taxes. B) bank panics. C) illegal activity. D) an increase in wealth.
A firm should keep producing output as long as the marginal profit is greater than zero, no matter how small it is.
Answer the following statement true (T) or false (F)
Suppose you are the manager of Sweet Aroma, a firm that specializes in air freshener. To make your air freshener, you purchase apple skins from apple juice manufacturers. If the demand for apple juice increases, this will cause the production of apple skins to ________ and the price of apple skins to ________.
A) decrease; rise B) increase; rise C) decrease; fall D) increase; fall
Assume the supply curve for cigars is a typical, upward-sloping straight line, and the demand curve for cigars is a typical, downward-sloping straight line. Suppose the equilibrium quantity in the market for cigars is 1,000 per month when there is no tax. Then a tax of $0.50 per cigar is imposed. The effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by
sellers falls from $1.50 to $1.40 . The government's tax revenue amounts to $475 per month. Which of the following statements is correct? a. The demand for cigars is less elastic than the supply of cigars. b. The tax causes a decrease in consumer surplus of $390 and a decrease in producer surplus of $97.50. c. The deadweight loss of the tax is $12.50. d. All of the above are correct.