If the current price of pizzas is above the equilibrium price of pizzas then
A. buyers of pizzas have an incentive to buy more.
B. sellers of pizzas have an incentive to decrease the price.
C. buyers of pizzas have an incentive to buy less.
D. sellers of pizzas have an incentive to increase the price.
Answer: B
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Which if the following is a key difference between profit-oriented institutions (such as small businesses) and non-profit institutions (such as governments, hospitals, or schools)? Profit-oriented institutions
A) are usually competitive rather than cooperative. B) have a recognized residual claimant. C) pursue private interests rather than the public interest. D) rely on monetary incentives to secure the cooperation required for their functioning. E) work through market processes.
The accountant for Muzhi's Sushi claims that Muzhi has accomplished "technological efficiency." This means that Muzhi's Sushi
A) produces a given output using the least inputs. B) produces a given output at the lowest cost. C) has an economic profit greater than a normal profit. D) has a normal profit greater than an economic profit.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The opportunity cost of one tomato is:
A. lower in Country A than Country B. B. the same in both countries. C. higher in Country A than Country B. D. impossible to calculate without more information.
Perfect competition and monopolistic competition are similar in this one respect:
a. firms make zero economic profit in the long run b. firms produce at the lowest point on their ATC curves c. there are few firms in each industry d. entry is difficult e. firms produce differentiated products