Use the following graph for a perfectly competitive firm to answer the next question.
The lowest price at which the firm should produce (as opposed to shutting down) is
A. P1.
B. P2.
C. P3.
D. P4.
Answer: B
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If a company pays a dividend of $2 to be received one year from now, dividends are expected to grow at a rate of 3 percent per year for the indefinite future, and the interest rate is 4 percent,
the price of the company's stock should be ________ per share. A) $3.40 B) $28.57 C) $200.00 D) $340.00
When a society takes increasing amounts of resources and applies them to the production of a specific good, resulting in increasing opportunity costs for each additional unit produced, which of the following applies?
A) the law of demand B) the law of supply C) the law of scarcity D) the law of increasing additional costs
When deciding whether to buy a second car, marginal analysis indicates that the purchaser should compare the:
a. benefits expected from two cars with the cost of both. b. additional benefits expected from a second car with the cost of the two cars. c. dollar cost of the two cars with the potential income that the cars will generate. d. additional benefits of the second car with the additional cost of the second car.
In the production of goods and services, trade-offs exist because
A) not all production is efficient. B) society has only a limited amount of productive resources. C) we have abundant resources to choose from. D) human wants and needs are limited at a particular point in time.