Suppose Mara and David compete, selling fried green tomatoes in a perfectly competitive market. If Mara increases output,
a. David must reduce output
b. the price David can charge falls
c. the price David can charge rises
d. the price David can charge is unaffected
e. David's economic profit must fall
D
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Refer to Figure 18.1. Canada has a comparative advantage in the production of
A) bicycles. B) hang gliders. C) both bicycles and hang gliders. D) neither bicycles nor hang gliders.
A firm's accounting profit is also its
A) economic profit. B) net income. C) statement of liabilities. D) income statement.
If the government wants to decrease the quantity consumed of cigarettes 20%, what percentage of tax would they have to levy on cigarette consumption?
a. 20% b. 30% c. 40% d. 50%
Adverse selection in insurance requires that
a. potential customers face different levels risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are not risk averse d. insurers can tell higher risk people from lower risk people