In a competitive market, profit can be considered a reward to businesses that
a. produce a good that consumers value more highly than its component resources.
b. reduce the value of resources used as inputs in production.
c. prohibit rival firms from entering the market and competing.
d. control costs, rather than following the wishes of consumers when deciding what products to produce.
A
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When the price of a Caesar salad is $5.00, the demand for Caesar salads is elastic, and when the price is $4.00, the demand is inelastic. If Mike's Roadside Restaurant cuts the price from $5.00 to $4.00, its total revenue from Caesar salads ________
A) will increase B) will decrease C) will remain the same D) might increase, decrease, or remain the same
Suppose a monopoly faces an inverse demand curve of P = 100 ? 2Q and has constant marginal cost of 6Q. If the government is considering legislation that would regulate price to the competitive level, what is the maximum amount the monopoly would spend on (legal) lobbying activities designed to thwart the regulation?
A. $500 B. $62.50 C. $562.50 D. None of the answers is correct.
When examining the growth record of any nation
A. no consideration should be given to the change in the average amount of leisure time in the nation. B. we must consider which income groups have benefited most from the growth. C. all that must be examined is increases in per capital real GDP. D. increases in per capita real GDP must be considered along with how far the production possibilities curve has shifted.
Suppose your utility function for food (F) and clothing (C) is u(F,C) = F + 4C. If you reduce your clothing consumption by 2 units, how much do you have to increase your food consumption in order to maintain the same utility level?
A) 2 units B) 4 units C) 6 units D) 8 units