The above figure shows a perfectly competitive firm. If the market price is $5 per unit, the firm
A) will definitely shut down to minimize its losses.
B) will stay open to produce and will make zero economic profit.
C) will stay open to produce and will incur an economic loss.
D) will stay open to produce and will make an economic profit.
E) might shut down but more information is needed about the fixed cost.
A
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In the above, which figure(s) has (have) at least one point at which the slope equals zero?
A) Figure B only B) Figures A and C C) Figure D only D) Figures A, C, and D E) Figures A and D
Because we cannot observe or measure utility
A) the predictions of marginal utility theory cannot be verified. B) marginal utility theory is incomplete and so its predictions might not be valid. C) marginal utility theory must be derived from assumptions about demand curves because demand curves can be measured. D) None of the above answers are correct.
Which of the following describes the difference between "scarcity" and "shortage"?
A) There is no difference; either word can be used to describe the situation that exists when there is less of a good or service available than people want. B) There is a shortage of almost everything. Scarcity occurs only if the quantity demanded of a good or service is greater than the quantity supplied at the current market price. C) In the economic sense, almost everything is scarce. A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price. D) In the economic sense, almost everything is scarce. A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the equilibrium price.
A person starts practicing poisonous snake charming after signing a contract with a health insurance company. This is an example of
A) moral hazard. B) adverse selection. C) signaling. D) screening.