One can tell that Figure 5.1 shows short run costs because:
A. the slope of total costs and variable costs are the same.
B. costs are rising.
C. total costs are positive when output is zero implying fixed costs.
D. All of these.
Answer: C
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If the price index last year was 1.0 and today it is 1.4, what is the inflation rate over this period?
A) -4% B) 1.4% C) 4% D) 40%
A sudden decrease in the market demand in a competitive industry leads to
a. A market equilibrium price higher than the original equilibrium in the short-run b. A market equilibrium price equal to the original equilibrium in the long-run c. Both a and b d. None of the above
Curly told Larry about his new business venture: Curly pays Acme International $1,000 per month for supplies, works out of his apartment on his own computer and earns a monthly revenue of $1,500. Should Larry quit his job and do what Curly is doing?
A. Not if Larry is earning more than $500 per month at his current job. B. Yes, as long as Larry can work out if his apartment and owns a computer. C. Yes, as long as Larry has at least $1,000 in savings to get started. D. Not unless Larry can borrow the $1,000 monthly payment at no interest.
If a consumer is maximizing his/her utility for a given income, the:
A. marginal utility for every good purchased would be the same. B. marginal utility per dollar spent for all goods would be the same. C. marginal utility per dollar for all goods would be at a maximum. D. total expenditure on each good would be the same.