Why can't all goods be inferior?
What will be an ideal response?
If all goods were inferior, an increase in income would lead to a decline in the quantity demanded for all goods. This, however, would leave the consumer below the budget line and therefore not achieving the highest utility possible.
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Which of the following would be an implicit cost for a firm?
A. The cost paid for leasing a building for the firm B. The cost paid for production supplies for the firm C. The cost of wages foregone by the owner of the firm D. The cost of worker wages and salaries for the firm
Diseconomies of scale at the firm level occur
a. wherever the firm's long-run average cost curve is horizontal b. wherever the firm's long-run total cost curve is horizontal c. where marginal cost equals marginal revenue d. if a firm becomes "too large" e. if any of the firm's plants becomes "too large"
When there is a shortage of a product in a market the:
a. price will fall. b. price must be below the equilibrium price. c. price must be above the equilibrium price. d. producers will reduce output and sales will fall.
The economic system that has the benefit of cooperation among individuals but suffers from a lack of individual initiative that leads to greater production describes the:
a. market economy. b. command economy c. soviet economy. d. traditional economy.