Refer to the above figure. If the market price is equal to A, which statement can be made about profits?
A. Profits are positive and equal to BCFG.
B. Profits are positive and equal to BCEA.
C. Profits are negative and equal to BCEA.
D. Profits are negative and equal to GFQ
0.
Answer: C
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What do economists mean by the phrase "sunk costs are sunk"?
a. Sunk costs are irretrievable, but they do lower profits and thus affect the firm's output level. b. Sunk costs are a primary reason why marginal costs tend to increase. c. Sunk costs cannot be recovered and are irrelevant to future decision making. d. Sunk costs lower consumer welfare, because producers "pass on" these costs in the form of higher prices.
Assume that the quantity of X is measured on the horizontal axis, and the quantity of Y is measured on the vertical axis. Assume that the price of X is $3 and the price of Y is $6. If Amanda has $90 to spend on X and Y, then
A. she can buy, at most, 15 units of good X. B. her budget line has a slope of ?3. C. she can buy, at most, 30 units of good X. D. her budget line has a slope of -2.
A television report states: "The Federal Reserve will lower the discount rate for the fourth time this year." This report indicates that the Federal Reserve is most likely trying to ________.
A. save the banking industry B. improve the savings rate C. stimulate the economy D. reduce inflation
The change in total revenue that results from employing one more unit of labor is called the
A) wage rate. B) value of marginal product of labor. C) average revenue. D) marginal product of labor.