After selling 1,000 three-ring binders Tony DiFulvio realizes that the marginal revenue from selling the last binder was less than the marginal cost. From this we can conclude that
A) Tony should shut down his business temporarily.
B) Tony's profit would be greater if he sold an additional three-ring binder.
C) Tony's business earns a short-run economic profit.
D) Tony's profit fell after selling his 1,000th three-ring binder.
D
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When income increases from $20,000 to $30,000 the quantity of inter-city bus trips taken per year decreases from 10 to 8. Hence
A) inter-city bus trips are a normal good. B) the income elasticity of demand for inter-city bus trips is -1.8. C) the income elasticity of demand for inter-city bus trips is -0.56. D) Both answers A and B are correct. E) Both answers A and C are correct.
OPEC successfully raised the world price of oil in the 1970s and early 1980s, primarily due to
a. an inelastic demand for oil and a reduction in the amount of oil supplied. b. a reduction in the amount of oil supplied and a world-wide oil embargo. c. a world-wide oil embargo and an elastic demand for oil. d. a reduction in the amount of oil supplied and an elastic demand for oil.