Refer to the graph shown of a monopolistically competitive firm. If the firm maximizes profit, it will earn:
A. zero economic profit this year.
B. $84,000 economic profit this year.
C. $320,000 economic profit this year.
D. $56,000 economic profit this year.
Answer: A
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Refer to the scenario above. Which of the following will happen if Sarah opens a day care facility and takes care of 5 children, in addition to her son, charging $12,000 per year for each child?
A) The country's trade deficit will increase by $2,400. B) The country's trade surplus will increase by $12,000. C) The country's GDP will decrease by $12,000. D) The country's GDP will increase by $60,000.
The classical theory predicts that
A) countries will completely specialize in the production of export goods. B) considerable trade will occur between countries with different levels of technology. C) small countries could obtain all of the gains from trade when trading with large countries. D) All of the above.
In a perfectly competitive industry, which of the following is true?
a. The competitive price is higher and quantity higher than the socially efficient point. b. The competitive price is higher and quantity lower than the socially efficient point. c. Since the industry is perfectly competitive, price and quantity are at the socially efficient levels. d. The competitive price is lower and quantity higher than the socially efficient point.
If price was set by the government at $4, there would be a price _____________, that would cause a ___________ of _______ units.
A. floor; surplus; 8
B. floor; surplus; 10
C. ceiling; shortage; 8
D. ceiling; shortage; 12