Joe's Garage operates in a perfectly competitive market. At the point where marginal cost equals marginal revenue, ATC = $20, AVC = $15, and the price per unit is $10 . In this situation,
a. Joe's Garage will break even
b. Joe's Garage will shut down immediately
c. the market price will fall in the long run
d. Joe's supply curve will shift to the left
e. Joe's Garage will suffer a loss in the short run, but stay in business
B
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The net effect of regional trade agreements has been
A) an increase in the total amount of trade in the world. B) a decrease in the total amount of trade in the world. C) no change in the total amount of trade in the world. D) either an increase or decrease in the amount of trade in the world, depending on where trade takes place.
In the figure above, when the price of a CD is $8.00, total producer surplus from all the CDs will be
A) zero. B) greater than at $10.00 per CD. C) $20 million. D) $10 million.
Comment on the following statement. "Once general equilibrium is achieved this will result in a long-run equilibrium as well."
What will be an ideal response?
When John was in college and his income was low, he drank "Red Ribbon" beer. As his income increased, he purchased better-quality beer and less "Red Ribbon." Which graph in the above figure best represents John's Engel curve for "
A) Graph A B) Graph B C) Graph C D) Graph D