At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling ten danishes, Nick experiences a producer surplus in the amount of $20 . Nick must be selling his danishes for
a. $2.00 each.
b. $0.50 each.
c. $3.50 each.
d. $5.00 each.
c
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Many borrowers defaulted on subprime mortgages ultimately disrupting financial markets by August 2007. Which of the following is a likely result of this increase in financial frictions?
A) The AD curve likely shifted left which caused a positive inflation gap. B) The AD curve likely shifted right which caused a positive inflation gap. C) The AD curve likely shifted left which caused an upward movement along the MP curve to a higher general equilibrium interest rate. D) The AD curve likely did not shift. E) none of the above
Average costs curves later rise
a. Due to declining average fixed costs b. Due to rising average fixed costs c. Due to declining marginal costs d. Due to rising marginal costs
Public policy responses to monopolies:
A. aim to break up existing monopolies. B. prevent new monopolies from forming. C. ease the effect of monopoly power on consumers. D. All of these statements are true.
Applied to perfectly competitive labor markets, the marginal principle tells firms to hire workers until:
A. the marginal revenue product of the last worker hired equals the wage. B. marginal productivity begins to diminish. C. average total costs are minimized. D. the price of the product equals the wage of the worker.