Both Kate and John own saltwater taffy factories. Kate's factory has low fixed costs and high variable costs. John's factory has high fixed costs and low variable costs. Currently, each factory is producing 1,000 boxes of taffy at the same total cost. Complete the following statement with the correct answer. If each produces
A. less, their costs will be equal.
B. more, the costs of Kate's factory will exceed those of John's factory.
C. less, the costs of Kate's factory will exceed those of John's factory.
D. more, their costs will be equal.
Answer: B
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Long lines and gasoline shortages during the 1970's can be attributed completely to the decision by OPEC to raise crude oil prices
a. True b. False Indicate whether the statement is true or false
Suppose the government sets a price floor that is above the equilibrium price for a given good. It can be said that at the price floor,
A) although sellers are selling all of the product that they desire at this price, the consumers are not able to buy all that they desire. B) although consumers are purchasing all of the product that they desire at this price, the sellers are not selling all that they desire. C) both sellers and buyers are satisfied with the quantity that is being exchanged. D) both sellers and buyers are exchanging the equilibrium quantity of this good. E) b and d
Which of the following describes the general effect of tariffs on consumer surplus as shown in Exhibit 1?
a. eliminated
b. unchanged
c. decreased
d. increased
Which of the following statements about a monopolist is TRUE?
A. All monopolies are unlawful in the United States. B. Monopolies tend to supply goods at lower prices than those charged by firms in perfect competition. C. Monopolies will always make a profit in the long run. D. Monopolies tend to misallocate resources.