Figure 10-1
?
If the profit-maximizing firm depicted in Figure 10-1 is perfectly competitive, how much output should it produce?
A. A
B. B
C. C
D. D
Answer: C
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You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the
A) marginal product of labor increases. B) price of labor increases. C) price of capital increases. D) price of labor decreases.
Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can produce a maximum of eight pies or two cakes in a day. Fred has an comparative advantage in the production of
A) cakes. B) pies. C) both cakes and pies. D) neither cakes nor pies.
In competitive markets,
a. firms produce identical products. b. buyers can influence the market price more easily than sellers. c. markets are more likely to be in equilibrium. d. sellers are price setters.
Refer to the accompanying figure, which shows the market for cups of coffee. What might cause a shift from the original demand curve to the new demand curve?
A. An increase in the price of coffee creamer. B. An expectation that coffee prices will fall in the future. C. An increase in consumers' tastes for coffee. D. A decrease in the price of tea.