A seller's supply curve shows the seller's:
A. hourly wage for producing an additional unit of output at each quantity.
B. opportunity cost of producing an additional unit of output at each quantity.
C. profit from producing an additional unit of output at each quantity.
D. willingness to pay for an additional unit of output at each quantity.
Answer: B
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If aggregate demand equals output,
A) the economy is in a recession. B) output will increase. C) output will fall. D) the economy is at its equilibrium level.
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
Adverse selection refers to when:
A. one party to a transaction has more information than the other and this results in a bargaining dispute. B. one party selects the wrong strategy and they are displeased with their selection. C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry. D. neither party is willing to be party to a transaction because they don’t have enough information.
A perfectly competitive firm may, under some circumstances, be able to affect the market price
a. True b. False Indicate whether the statement is true or false