Which of the following is most likely to be a price taker?
a. a respected heart surgeon
b. an ice cream shop owner located in Atlanta, Georgia
c. a beachside tourist resort
d. a Kansas wheat farmer
d
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Happy Cows is a dairy farm that is currently earning $20,000 in economic profit. The managers of Happy Cows are considering adding a second dairy farm; however, the managerial diseconomies from adding the second farm cause Happy Cows current farm's economic profit to fall to $15,000. It is economically sound for Happy Cows to add the second farm if ________.
A) the second farm's economic profit is at least $4,800 B) the second farm's economic profit is at least $4,000 C) the second farm's economic profit is less than $5,000 D) the second farm's economic profit exceeds $5,000
Suppose an individual discovers the mouth of a previously unknown cave (expected to contain a single large diamond) on his property that extends under land owned by others. To arrive at an economically efficient outcome with low transaction cost, the law will:
a. award the diamond to the person who locates the diamond first. b. award the diamond and cave to the person whose land it opens into. c. award the diamond to the owner of the land above it. d. award the diamond to each of the owners under whose land the cave passes.
In measuring the sensitivity of demand, the
a. price and income elasticities refer to movements along the demand curve; other elasticities refer to shifts of the entire demand curve b. price and cross-price elasticities analyze movements along the demand curve; other elasticities refer to shifts of the entire demand curve c. income and cross-price elasticities refer to movements along the demand curve; price elasticity refers to shifts of the entire demand curve d. price elasticity refers to movements along the demand curve; income and cross-price elasticities refer to shifts of the entire demand curve e. income elasticity refers to movements along the demand curve; other elasticities refer to shifts of the entire demand curve
Exhibit 7-12 Cost schedule for producing pizza Pizzas FixedCost VariableCost TotalCost 0 $ $ $ 1 48 2 17 3 27 4 78 5 40 6 64 7 80 In Exhibit 7-12, the marginal cost of producing the 3rd pizza
A. is higher than the average total cost of 3 pizzas, so the average total cost curve is increasing at a quantity of 3 pizzas. B. is lower than the average total cost of 3 pizzas, so the average total cost curve is decreasing at a quantity of 3 pizzas. C. is equal to the average total cost of 3 pizzas, so the average total cost curve is minimized at a quantity of 3 pizzas. D. is higher than the average fixed cost of 3 pizzas, so the average fixed cost curve is increasing at a quantity of 3 pizzas.