A fair price gets its name because it is the price at which
a. society values the marginal product in proportion to the cost of the resources used in production
b. the marginal benefit of the last unit consumed is equal to the marginal value of the resources used to produce it
c. the monopolist would make normal profit in a competitive market
d. resources are distributed equitably
e. normal profit would be made in any other market
C
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Which of the following statements about an entrepreneur is true?
A) purchases other factors of production in the output market B) develops the vision for the firm and funds the producing unit C) sells his entrepreneurial services in the output market D) does not face personal risk
Answer the following statement(s) true (T) or false (F)
1. The marginal cost of producing tea can be measured in dollars per pound of tea. 2. A firm's revenue can be calculated from its demand curve using the formula "price times quantity." 3. Fixed costs have no effect on a firm's profit. 4. Profits will be positive as long as marginal revenue is greater than marginal cost. 5. If marginal cost exceeds marginal revenue, then a reduction in output will create higher profits.