Suppose a new study highlights the health benefits of eating bacon. At the same time, suppose the cost of producing bacon falls. Given these changes, you should expect to see:
A. an increase in both the equilibrium price and quantity of bacon.
B. an increase in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity.
C. an increase in the equilibrium quantity of bacon, but it's hard to say what will happen to the equilibrium price.
D. a decrease in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity.
Answer: C
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Other things remaining the same, which of the following is likely to decrease both the wage rate and the number of workers hired in a tea estate?
A) An increase in the price of tea B) A decrease in the price of tea C) A decrease in the opportunity cost of leisure D) An increase in the opportunity cost of leisure
A firm sells 300,000 units per week. It charges $ 35 per unit, the average variable costs are $40, and the average costs are $55 . At what price does the firm consider shutting-down in the short run?
a. $45 b. $40 c. $95 d. $55