Land of Many Lakes (LML) sells butter to a broker in Albert Lea, Minnesota. Because the market for butter is generally considered to be competitive, LML does not choose the
a. quantity of butter to produce.
b. price at which it sells its butter.
c. profits it earns.
d. All of the above are correct.
b
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Perfect Shots is company specializing in wedding photos and they have a fixed advertising budget. Perfect Shots advertises on the radio and the television and it costs $5,000 per unit of radio advertising and $14,000 per unit of television advertising. At their current advertising levels, the marginal benefit from radio advertising is $4,800 and the marginal benefit from television advertising is
$14,250. To optimally allocate their advertising budget, Perfect Shots should ________. A) decrease the amount of advertising in radio and television B) increase the amount of advertising in radio and decrease the amount of advertising in television C) decrease the amount of advertising in radio and increase the amount of advertising in television D) increase the amount of advertising in radio and television
Suppose you observe that the price of a good increases and that the quantity of this good sold also increases. If only the demand curve or the supply curve shifts this suggests that
A) supply increased over time while demand remained the same. B) supply decreased over time while demand remained the same. C) demand increased over time while supply remained the same. D) demand decreased over time while supply remained the same.
International capital flows in an open economy have the effect of
A. increasing the power of fiscal policy. B. reducing the power of fiscal policy. C. reducing the power of fiscal policy in an expansion, and increasing it in a contraction. D. increasing the power of fiscal policy in an expansion, and reducing it in a contraction.
Private goods are both
a. excludable and nonrival in consumption. b. nonexcludable and rival in consumption. c. excludable and rival in consumption. d. nonexcludable and nonrival consumption.