What is the usual response of firm to an increase in the price of what they sell?
a. An increase in output.
b. An increase in hiring factors of production.
c. An increase in the profit level of the firm.
d. An increase in employment at the firm.
e. All of the above.
e
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Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12
If the market price is $11 then the market supply for this good will be A) 3 units. B) 4 units. C) 1 unit. D) 2 units.
Using the government as a means of redistribution generates equity at the cost of efficiency, in part because
A) the process of redistribution uses up some of society's resources. B) the process of redistribution creates new resources for society. C) redistribution creates new incentives to work for both rich and poor. D) redistribution would not take place otherwise.
Perfect price discrimination:
A. requires each customer to pay exactly his or her willingness to pay. B. maximizes consumer surplus. C. is not efficient. D. minimizes producer surplus.
In the circular flow model, firms sell the services of factors of production to households.
Answer the following statement true (T) or false (F)