In Figure 5.8, if the supply curve moves from S4 to S5,
A. the firm will make a smaller economic profit than they used to.
B. the firm will go from making a loss to a bigger loss but one that is not big enough to make it want to shutdown.
C. the firm will go from making an economic profit to a normal profit.
D. the firm will go from making a loss to a bigger loss that is big enough to make it want to shutdown.
Answer: B
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Opportunity cost is a measure of
a. foregone opportunities. b. value based on the alternative not chosen. c. value in terms of the cost of production. d. the difference between production cost and resource cost. e. both a and b.
When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied resulting in
a. excess demand or shortages. b. excess supply or surpluses. c. equilibrium prices. d. price controls.
Which of the following best defines discrimination?
a. Acting on a belief that people of a certain race or gender are inferior b. Believing that people of a certain race, gender, or religion are inferior c. Making disparaging comments about a specific race, gender, or religion d. Avoiding any association with people who belong to a certain religion or race
Economists maintain that the price of a product has no effect on demand. How can this be true?