Dana spends $10,000 on remodeling a storefront that she then opens as a shoe store. The business has not been very successful, and she needs an additional $3,000 to keep the shoe store open. Which of the following is TRUE?
A) The $10,000 Dana spent on remodeling represents a part of the total variable cost of her business.
B) The $3,000 represents her marginal costs of production.
C) The $10,000 Dana spent on remodeling is a fixed cost of her business.
D) The $3,000 Dana needs to keep the deli open represents her total fixed costs.
C) The $10,000 Dana spent on remodeling is a fixed cost of her business.
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Overall, government intervention in the financial system ________
A) is both essential and imperfect B) prevents adequate market solutions to market problems C) is continually improving and expanding D) is incompatible with an efficient allocation of resources
The maximum price that a consumer is willing to pay for a good is called:
A) the reservation price. B) the market price. C) the first-degree price. D) the block price. E) the choke price.
One reason why individuals with greater ability often receive higher wage rates is that they
a. face discrimination b. have low marginal products c. have high marginal revenue products d. face diminishing marginal returns e. often are employed in industries experiencing economies of scale
Answer the following statement(s) true (T) or false (F)
1. Supply refers to how much of a product or service is available for purchase at a given time. 2. The law of demand states that as the price for an item or service increases, so will the supply and that if the price is lower, the supply will also be less. 3. Mae bakes 100 cinnamon rolls each day to sell at her café, and each day she sells out before breakfast is over. Many of her customers ask for, but don't get one. Her customers ask that she bake more cinnamon rolls each day. This is an example of a shortage. 4. Holding all other factors constant, prices are set slightly above the point where supply equals demand. 5. The price at which supply of an item or service equals the demand for that item is known as the market price.