Use the figure above to answer this question. Mary is the only veterinarian in a small town. To maximize her profit, Mary will choose to treat ________ animals per hour and charge ________ per customer in order to ________
A) 4; $50; maximize profit
B) 6; $20; maximize profit
C) 6; $30; minimize average total cost
D) 4; $50; operate on the inelastic portion of her demand curve
E) 6; $20; minimize cost in order to attract more customers
A
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The paradox of value is illustrated by the fact that
A) a pound of bread is cheaper than a pound of gold. B) teens buy designer jeans. C) if diamonds were free they would no longer be useful for engagement rings. D) gold and diamonds occupy little space.
For natural monopoly markets, government regulators frequently encourage competition among a number of firms.
Answer the following statement true (T) or false (F)
Which of the following is an example of the rationing function of price?
A. A firm attempting to lower its explicit costs B. Government price controls C. Switching from a Ph.D. in economics to one in finance because finance salaries are higher D. Bill Gates purchasing the Mona Lisa for $5 billion
Andy does not bother to lock the door to his house because he has theft insurance. This is an example of:
A. a positive spillover. B. moral hazard. C. adverse selection. D. irrational behavior.