Farmer Jones is producing wheat, and must accept the market price of $6.00 per bushel. At this time, her average total costs and her marginal costs both equal $8.00 per bushel. Her average variable costs are $5 per bushel. In order to maximize profits or minimize losses, farmer Jones should:
A. Increase output
B. Increase selling price
C. Produce zero output and close down
D. Continue producing, but reduce output
D. Continue producing, but reduce output
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In the Monetarist model, the long-run holds when
a. the money supply is constant. b. real wages are constant. c. output is constant. d. the expected price level equals the actual price level. e. none of the above.
Brandon Wallace tutors economics students. He finds that when he charges $5 per hour, students demand a total of 30 hours of tutoring per week; however, when he raises his rate to $8 per hour, they demand only 26 hours of tutoring. a . Calculate the
price elasticity of demand for Brandon's tutoring. b. Is demand for Brandon's tutoring price elastic, unit elastic, or price inelastic? Which rate should he charge to maximize his revenue? c. Brandon finds that he can raise his rate to $10 per hour during the week before final exams and students will continue to demand 26 hours of tutoring. Explain why this is so.
In the United States, government regulation is primarily designed to:
A.) Protect the environment through government ownership of natural resources. B.) Prevent businesses from competing with each other. C.) Protect labor, consumers, and the environment. D.) Determine all the answers to the WHAT, HOW and FOR WHOM questions.
You have just graduated from college and are buying a brand new car. There are two on the lot: a green one and a blue one. Both have the same features for the same price. Is there a potential asymmetric information problem?
What will be an ideal response?