Refer to the figure at right. What can we say about economic? rent?
A. Economic rent equals the area HJKO
B. Economic rent equals the area HJI
C. Economic rent equals the area IJK0
D. There is no economic rent represented in the figure
Ans: C. Economic rent equals the area IJK0
You might also like to view...
The per-worker production function flattens out due to ________
A) the negative relationship between price and quantity demanded B) the positive relationship between price and quantity demanded C) the diminishing marginal product of capital D) an increase in the general level of prices
A firm will increase its spending on advertising until
A) it has monopolized the market. B) it has deterred all future entry. C) the marginal benefit of advertising is zero. D) the marginal benefit of advertising equals the marginal cost of advertising.
Adam Smith believed that the best way to promote the public interest was to
A. have the government produce most goods and services. B. let people pursue their own selfish interests. C. wait for individuals to set out to promote the public interest. D. get rid of the price mechanism.
Refer to the above figure for the individual firm in a perfectly competitive market. If the firm's average costs are given by AC2, then
A. the industry demand curve will shift rightward. B. the industry supply curve will shift rightward. C. the industry supply curve will shift leftward. D. none of these.