If firms in a competitive market have different cost functions, then
A) there is no short run market supply curve.
B) the market supply curve reflects those firms' operating envelopes, even in the short run.
C) some of the firms will shut down because their costs are too high to compete.
D) the firms' marginal costs will be different at the market price.
B
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A bond will pay $10,000 to its owner in 5 years. If the relevant annual interest rate is 5%, what is the bond worth today (rounded to the nearest 100)?
A. $9,500 B. $7,800 C. $6,600 D. $1,900 E. None of the above.
A strength of the market economy is that:
A. it results in an equal distribution of wealth. B. resources are used efficiently. C. planners rather than consumers determine answers to the basic economic questions. D. information for production and distribution decisions passes directly from the government to buyers.
Suppose that if poor households have a price elasticity of demand for medical care of 0.50 and rich households have a price elasticity of demand for medical care of 0.25, then a price increase of 10% would lead to the poor households reducing their quantity demanded for medical care by:
A. 2.5%. B. 5%. C. 25%. D. 50%.
The opportunity cost of going to college for a student receiving a scholarship
A) is the income that she would have earned if she did not go to college. B) is the risk of dropping out. C) is the food and living expenses that she has to purchase while in college. D) is zero because she does not have to pay tuition.