Tara sells her organic carrots in a perfectly competitive market for a price that is just higher than her minimum average variable cost of production, but lower than her minimum average total cost of production. Which of the following statements is then true?
a. Although she is currently incurring a loss, she could restore profitability by advertising her carrots.
b. She can minimize her losses by shutting down her operations now.
c. She is incurring a loss, because price is less than ATC.
d. She is earning a profit, because price is above AVC.
Ans: c. She is incurring a loss, because price is less than ATC.
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The above figure represents the market for teenage workers at fast-food restaurants in Kansas City
a) What is the equilibrium wage rate and employment? b) Describe the market at a wage rate of $6 per hour. c) Describe the market at a wage rate of $12 an hour. d) How would an increase in the number of young, married college graduates, who tend to eat at fast-food restaurants, affect the figure, the equilibrium wage rate, and employment?
One measure of the inflation rate is the
A) sum of the CPIs of adjacent years. B) percentage change in the CPI of adjacent years. C) percentage change in the Real GDP of adjacent years. D) GDP minus the Real GDP in a year.