The opportunity cost of producing one more unit of a good or service is the
A) marginal cost.
B) marginal benefit.
C) efficient level of production.
D) market outcome.
E) price of the good or service.
A
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Suppose that the price of wheat is above its equilibrium price. You would expect to see
A) a shortage on the market that causes prices to increase further. B) an increase in quantity demanded because of the high price. C) a leftward shift of the demand curve because of the high price. D) sellers begin to lower their prices because of the surplus of wheat.
In the classical model, what happens to the level of real GDP if aggregate demand increases?
A. Real GDP would increase at first, then decrease. B. Real GDP decreases. C. Real GDP increases. D. Real GDP would remain the same, at equilibrium.
Answer the following questions true (T) or false (F)
1. If a monopolistically competitive firm breaks even, the firm is earning as much in this industry as it could in any other comparable industry. 2. A monopolistically competitive firm that earns economic profits in the short run will be able to expand its market share even if the market size remains constant. 3. A monopolistically competitive firm that earns economic profits in the short run will face a more elastic demand curve in the long run.
Refer to Scenario 9.7 below to answer the question(s) that follow. SCENARIO 9.7: Julio borrowed $80,000 from his great aunt to open a coffee stand at a local flea market. He agrees to pay his great aunt a 5% yearly return on the money she lent him. His other yearly fixed costs equal $16,000. His variable costs equal $60,000. He sold 50,000 cups of coffee during the year at a price of $3.00 per cup.Refer to Scenario 9.7. Julio's total costs equal
A. $20,000. B. $40,000. C. $60,000. D. $80,000.