A flood damages many homes and farms in the Midwest. Shortly thereafter, the price of plywood rises significantly. The events suggest that:
a. a decrease in the supply of plywood caused the price of plywood to rise.
b. an increase in the supply of plywood caused the price of plywood to rise.
c. a decrease in the demand for plywood caused the price of plywood to rise.
d. an increase in the demand for plywood caused the price of plywood to rise.
d
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A firm has MR = $70 and MC = $20 + Q. Fixed costs are $175.
(a) If the firm is currently producing 30 units, what are its marginal cost and marginal revenue at the current output level? (b) Is the firm maximizing profits? If so, how can you tell? If not, what can the firm do to increase profits?
Total profit = Total revenue ? Total cost (including opportunity cost). Total profit defined in this way is called
A. accounting profit. B. economic profit. C. absolute profit. D. relative profit.
Law of Supply
What will be an ideal response?
A tax increase is usually borne
A. entirely by the seller. B. entirely by the buyer. C. partially by the seller and partially by the buyer.