The market price for wallets is $20 . Your technology is such that at your most efficient production point, the average total cost of producing a wallet is $2.50 . Your manager runs into your office and shouts, "Boss! Average costs are rising! Average costs are rising!" To make a profit-maximizing decision, you should
a. definitely decrease production
b. immediately stop production
c. completely ignore your manager
d. ask the manager about the marginal cost
e. ask the manager about the average total cost
D
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To say that the housing market is in equilibrium means that
a. there are no vacant houses b. the number of houses that are being constructed is equal to the housing stock c. the number of houses that are currently empty is equal to the number of households currently looking to buy a house d. the quantity demanded of houses is equal to the number of houses currently under construction e. the number of houses that people want to own is equal to the housing stock
Which is not considered to be an economic resource?
A. Tools and machinery B. Money C. Labor D. Land (or other natural resources)
The cross price elasticity of demand helps determine, empirically, whether a good is
A. normal or inferior. B. unit elastic or perfectly inelastic in its own demand. C. a necessity or a luxury. D. a complement or a substitute to another good.
The rising price of oil has made it feasible to extract oil out of oily sand in Canada. Concerning the oil market this is an example of
A) a higher price elasticity of supply in the long run. B) a higher price elasticity of supply in the short run. C) a higher price elasticity of demand in the short run. D) an inelastic long-run supply of oil.