For decision-making purposes, fixed costs incurred by a firm with market power are
A. not taken into consideration.
B. the same as opportunity costs of production.
C. the same as variable costs.
D. the same as marginal costs.
Answer: A
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If the market for bottled spring water is characterized by a very elastic supply curve and a very inelastic demand curve, an outward shift in the supply curve would be reflected primarily in the form of
a. higher prices. b. higher output. c. lower prices. d. lower output.
Internet auctions
a. allow specialized sellers to reach many customers at low cost b. allow specialized buyers to reach many sellers at low cost c. always take the form of a Dutch auction d. always take the form of an English open outcry auction e. are rapidly being replaced by continuous open outcry auctions
Consider an economy that is in short-run equilibrium with unemployment below the natural rate. According to the passive approach, low unemployment will eventually cause wages to fall, lowering the firms' cost of doing business
Indicate whether the statement is true or false
Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and food is relatively land-intensive. If the countries engage in free trade, Alpha will
A. import both goods. B. export food and import drink. C. export drink and import food. D. export both food and drink.