Profits
What will be an ideal response?
When sales revenue is less than the cost of production. Taking a set of resources worth a certain amount when you buy them and combining them in such a way that the total value of the resources is now more than what you originally paid for them.
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Refer to Figure 10-5. Which of the following statements is true?
A) Bundles r and w are not affordable. B) The consumer gets more utility from bundle r than from bundle v. C) The consumer gets less utility from bundle w than from bundle v. D) Bundles r, s, t, and u all cost the same.
If the production possibilities curve is a downward sloping straight line, then
A) resources are highly specialized, making it difficult to use them for alternative uses. B) technological change has increased. C) production is efficient only when producing at the mid-point. D) all resources must be perfectly adaptable for alternative uses.
A price-discriminating monopoly charges the lowest price to the group that:
A. has the most elastic demand. B. purchases the largest quantity. C. engages in the most arbitrage. D. is least responsive to price changes.
The insurance industry is susceptible to moral hazard problems, but not problems of adverse selection.
Answer the following statement true (T) or false (F)