Suppose the market for coffee is in equilibrium at a price of $5 per pound. This means that:
A. any producer who sells coffee can earn a positive economic profit.
B. potential producers not producing coffee have reservation prices less than $5 per pound.
C. potential consumers not buying coffee value it at less than $5 per pound.
D. everyone can afford to buy coffee.
Answer: C
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If a marginal cost pricing rule is imposed on the firm in the figure above, the firm will produce
A) 5 units. B) 20 units. C) 30 units. D) 40 units.
By 2003, the average person in the West had about
a. 50% more income than the average person in the West in 1820. b. twice as much income as the average person in the West in 1820. c. ten times as much income as the average person in the West in 1820. d. twenty times as much income as the average person in the West in 1820.
In the long run, a firm in a perfectly competitive industry will supply output only if its total revenue covers its
A) explicit costs plus its implicit costs. B) fixed costs. C) implicit costs. D) explicit costs.
The process of arbitrage:
A. raises or lowers the average expected rate of return of a financial asset with a given level of risk. B. vertically shifts the Security Market Line. C. moves a financial asset along the Security Market Line. D. pushes all financial assets to the same average expected rate of return and risk level.