Refer to the table above. What is the shortage in the market when the price of a notebook is $3?
A) 4 units
B) 10 units
C) 16 units
D) 20 units
A
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A firm currently has 5 workers each paid $15 per hour. If it decides to hire a 6th worker, the hourly wage increases to $18 for all workers. The 6th worker is expected to contribute to around $40 worth of output. Based on this information, the firm should
a. Hire the 6th worker since MR>MC
b. Not hire the 6th worker since MR>MC
c. Not hire the workers since MR
Which of the following gives pollution-emitting firms an incentive to reduce the damage they do to the environment?
a. Negative externalities b. Positive externalities c. Commands and controls d. Pollution charges
The average price of gasoline in your neighborhood is $2.15 per gallon. Your neighbor, Diana tells you that you can "save a lot" by frequenting a gas station 20 miles outside your neighborhood where the price of gasoline is $2.06 per gallon However, she
cautions you that there are usually long lines at that station. Is her suggestion beneficial to you? A) Yes, since gasoline is a necessity for car owners, the total cost savings would be relatively substantial. B) No, if one factors in the non-monetary opportunity costs (driving time and waiting in line), it could prove more costly to go to the lower-priced gasoline station. C) Yes, the lower price of gasoline at the rival station increases my purchasing power and enables me to consume more of other goods. D) No, my friend is misled; clearly, the lower-priced gasoline must be of inferior quality and could damage vehicles.
Consider the market for opticians. What is likely to happen to the equilibrium wage and quantity of opticians if more and more people turn to laser eye surgery instead of wearing glasses or contact lens?
A) The equilibrium wage falls and the equilibrium quantity of opticians rises. B) The equilibrium wage and the equilibrium quantity of opticians rise. C) The equilibrium wage and the equilibrium quantity of opticians fall. D) The equilibrium wage rises and the equilibrium quantity of opticians falls.