In Figure 8.10, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit-maximizing price of $300 per ticket. Suppose that Fly Smart discovers that a second airline is contemplating entering the market. If the minimum market entry quantity is 130 passengers per day, what price should Smart Fly charge to secure the entry-deterring quantity?
A. $300
B. $220
C. $180
D. $100
Answer: B
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Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. Labor Hours= 1 lb Lbs produced in 24hrs Pork. Tomatoes. Pork. Tomatoes F. 6. 3. 4. 8 R. 4. 4. 6. 6
Refer to Table 3-23. The opportunity cost of 1 pound of pork for the farmer is
a) 1/2 pounds of tomatoes
b) 1/2 hour of labor
c) 2 pounds of tomatoes
d) 2 hours of labor
In long-run equilibrium under conditions of pure competition and productive efficiency, all firms produce at minimum:
A. average variable cost. B. marginal cost. C. total cost. D. average total cost.
Suppose the economy is operating below its full employment level. The Fed
A. can move the economy toward the full employment level by expanding the money supply to increase aggregate supply. B. can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant. C. can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects. D. is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
For each of the following changes, what happens to the real interest rate and output in the very short run, before the price level has adjusted to restore general equilibrium?(a)Wealth rises.(b)Money supply rises.(c)The future marginal productivity of capital increases.(d)Expected inflation declines.(e)Future income declines.
What will be an ideal response?